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given the conservative bias of the estimate provided here, it is believed that the cost per customer of PHY-SC-based WiMAX would be no more than what is discussed here for comparable services due to the amortization of the cost of single Subscriber Stations (SS) over multiple customers in one building that can be realized using PHYSC technology Therefore, for the sake of this economic assessment, we assume that NLOS technology using OFDM-PHY is used Let us assume that Ethernet services are provided from a WiMAX Base Station (BS) located on the roof of a high-rise building with access to a metro fiber core Let us also assume that the service area is divided into three sectors with only one channel per sector, with each channel using a 20 MHz bandwidth spectrum to deliver 75 Mbps of shared bandwidth per sector Based on the current state of the industry, the cost of a BS as described in this scenario can be conservatively estimated to be about $30K The cost of additional networking equipment required at the site of the base station can be estimated to be about $10K Additional $10K (a very rough estimate) may be required for additional installation expenses such as cabling and mounting Therefore, based on this rough but very conservative estimate, the cost of deploying a WiMAX base station is about $50K In addition to the base station, a CPE device (a WiMAX subscriber station) would be required at each customer site; the cost of each is estimated to be about $15K The WiMAX network thus deployed can deliver a total of 225 Mbps of bandwidth shared among the users of the network, as much as 75 Mbps of which could be delivered to each customer In a typical scenario, customers are provided various types of services distinguished from each other by the bandwidths they offer The network operators also oversubscribe their network to various degrees to achieve better cost amortization Given such a diverse set of scenarios, Table 153 provides the cost per customer for deploying WiMAX services for various types of broadband services and under various oversubscription scenarios It should be noted that the model only provides an estimates of upfront capital expenditure and does not provide the operational expenses Such expenses may include roof leasing and spectrum licensing cost (if licensed spectrum is used) However, such expenses are not expected to be significant when amortized over several subscribers.

TABLE 153 Estimated Cost per Customer of a 75 Mbps WiMAX Network for Various Services and Subscription Models Oversubscription Rate No oversubscription Two times Five times Ten times 15 Mbps Service $18K $17K $16K $15K 5 Mbps Service $26K $21K $17K $16K 10 Mbps Service $37K $26K $19K $17K

When a user wants more bandwidth than the T-1 currently provisioned, the significant time and work required could lead to the customer switching to another Service Provider, especially in a competitive market Thus, with TDM services, a customer will likely switch providers periodically 52 The relationship between Service Provider Ethernet offerings and customer demand is not only causal Ethernet offers independent advantages to both customers and Service Providers

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Performance range specifies the low and high spread of performance for payment purposes The low point of this range represents minimal performance where performance below this level should not receive incentive payment The high point of this range represents excellent performance where outstanding performance should receive outstanding pay such as 3x leverage The performance range of a measure differs from one measure to another, from one job to another, from one company to another, and from one industry to another As an example, the performance range for an established consumer product is normally very narrow Salespeople will find it unlikely to sell above 105 percent of goal Likewise, the chance of falling below 95 percent of goal is also remote Mature consumer products have a very predictable and narrow performance range However, new growth industries might have a very wide performance range As an example, sales of 200 percent over goal might be the norm for exceptional performance while 50 percent of goal might be considered typical minimal performance Each performance measure has its own performance range Sales management can best determine the performance range for a given measure by examining its historical range In Figure 2-9A, the performance range is from 70 to 145 percent Low performers (10th percentile) perform at or below 70 percent to quota Excellent performers achieve 145 percent of quota where the

Customer Retention Comparison $7,000,000 $6,000,000 $5,000,000 Year 5 - Service Provider A has 26 times More Revenue than B! $2,000,000 $1,000,000 $1 2 3 Year 4 Service Provider B 5

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