By Joel Pirard
As an Internet Service Provider (ISP), you are in a business with a great future ahead. The Internet is here to stay, and digital connectivity is more important than ever. Behind every service there is a business, and for every business, it is essential to know its value. In discussions with investors, be it during presentations or due-diligence processes, it is to a great advantage that you can both show and prove key aspects that will determine the value of your network. So, what will influence the value, and how do you get the correct oversight? Let me introduce five key aspects that you should consider.
Key aspect 1 – The network numbers
Whether you are the owner of your network, operate with investors, or want to show it for potential buyers, the network numbers will be in focus. The numbers of your network are important for all mentioned, and it is very much to your advantage that you can show them. You would probably start by looking at the infrastructure of your network, how much you already have invested, and what capacity the network holds in its current state. Other interesting numbers are how many customers you have, and if you deliver to the Service Level Agreement (SLA) you have signed. The revenue of what it brings in now, and then what future capacity there is.
Key aspect 2 – Homes connected and homes passed
Often involved when discussing the value of a network is homes connected and homes passed. It is easy to think that if there are homes passed in an area where you already provide fiber, these homes should easily be connected, and the addition of customers would increase the value of the network. But what really is “homes passed”? Are they homes that you have enough fiber capacity to connect tomorrow? Should you have fiber capacity to reach them, they can easily be added to the potential revenue. However, should it cost a lot to get these homes connected, due to your fiber capacity not being enough, it might cost a lot to get them connected. These outgoings must be part of your equation.
Key aspect 3 – The potential to further develop your network
Currently, there is a dire need for digital connectivity. Should you wish to further develop your network, this is the time to do it. The geographic location is to consider, and to be able to show the potential growth of your network will increase its value. A fiber network rollout is a cumbersome process, so it is always best to consider other options first. Should the network be in an urban area, there might be opportunities to utilize existing assets and/or street furniture. Should the network be in rural areas, there may be environmental impacts to consider. You also need to know what other networks that are offered in your area – are these competitors or potential acquisitions?
Key aspect 4 – How to future-proof your network
Today, we accept nothing less than constant connectivity, unless we make an active choice against it. The demands of faster and better Internet access are constant. Exactly what you need to deliver tomorrow to maintain a top-quality service we may not know, but what we do know is that a future-proof network is worth more than one that is not. With a future-proof network, you can trust that the further development of it will be smooth, and not require too much investment. Should it hold capacity for further connections, with more bandwidth, then you know that more revenue will be generated.
Key aspect 5 – Efficiency in operation
A fiber network must be maintained to keep the efficiency of the operation, and you will want to be on top of your game. To optimize your service, planning for maintenance is part of avoiding breakages and outages. To do this, you need to know who will perform maintenance, and who to inform when this is to be executed. Should it be in need of restoration, it is best to be on top of things, and conduct necessary repairs before things actually break.
Reflect the value of your network with a Digital Twin
The mentioned key aspects are invaluable when estimating the value of your network. And how is it done? With a Network Information System (NIS), you can compile all data needed for the lifecycle of your network: planning, designing, building and operating. This data creates a Digital Twin. Should you need to provide investors or stakeholders with facts, figures and numbers regarding your business, you will have it all ready at hand. You will be able to explain what you have invested in, how old or new it is, and what capacity is has. From the age and lifespan of your cables to the condition that the cables are in. You will be able to show where your network is, how it is connected, who the end-customer is, and how much committed uptime they have. Moreover, you will show how the network is built, and if it lives up to the Service Level Agreements (SLAs) that you have signed. The Digital Twin gives a clear and structured view of the network, and allows for an understanding of investments, outgoings and incomes. As an ISP, whether you are from a large national company or a small local business, you will benefit from knowing how much your network is worth. Not only today, but also for your future revenue.
At the INCA conference 2022 in Liverpool, Joel Pirard was part of a panel discussing how management and investors best can evaluate fiber networks. After the discussion, he was interviewed by INCA TV.
For further information on how a Digital Twin can help you to estimate the value of your network, do not hesitate to contact Joel Pirard. Learn more about Utilising existing infrastructure for fibre rollout when connecting Britain in this blog by Rob Leenderts.
Meet the expert
Joel Pirard is VP Sales Telecom at Digpro. With extensive experience from the software industry, including areas such as business development, telecom, OSS/BSS, GIS and NIS, he knows the true value of a Digital Twin. Joel studied Information Technology at Master of Science level at Linköpings University, and has worked at Digpro since 2013.