 costs What to do if the ISP you sell to botches up completely and your reputation gets dragged through the mud because of their incompetence TIP: Seek out the ISPs who are seeking to aggregate a couple dozen regional/local ISPs to take them public in the near future. These deals can bring you much more than the standard ISP subscriber-based buyout-if you do not mind the wait and the risk. One other resource you may want to check out is ISP-Planet's Subscriber Values table, which lists valuations per subscriber of the largest publicly traded ISPs. Advances and Opportunities in Next-Generation SONET A.4 Modeling Item #4 The material that follows is from Market Data from MCG Capital Corpo- ration (as reported at http://www.isp-planet.com/research/subvalues/ subvalues_january_2001.html#mcg). By Number of Subscribers Less than 5,000 to Greater than Subscribers 5,000 20,000 20,000 Average Average Average Price per $ of revenue $1.98 $4.75 Price per subscriber $3,713 Revenue/sub/month $52.23 $26.63 $24.22 Last 12 Months (6/99-6/00) Average Median Price per $ of revenue $2.34 Price per subscriber $1,199 Revenue/sub/month $35.27 $20.83 Residential ISPs (less than $30 rev. per sub.) Average Median Price per $ of revenue $3.06 $2.25 Subscriber multiple Revenue/sub/month $20.44 $19.4 Business ISPs Average Median Price per $ of revenue $4.00 $2.35 Subscriber multiple $3,105 Revenue/sub/month $3,960 $166.67 (continued) Chapter 1 Private Market Deals Average Median Price per $ of revenue $3.11 $2.27 Price per subscriber Revenue/sub/month $34.96 End Notes 1. We have previously called these access networks neighborhood area networks (NANs). 2. This is derived by assuming that 10 percent of the traffic is destined for the outside and that an inside-to-outside concentration of 10 to 1 is suitable. 3. D. Minoli, P. Johnson, and E. Minoli, Ethernet-Based Metro Area Networks (New York: McGraw-Hill, 2002). 4. White Paper, "An Optical Ethernet Business Case for Incumbent Local Exchange Carriers-A Nortel Networks Business Case," Publica