It’s not a question of money It’s just a question of the amount.
I met Ben Sayevich almost five years ago. Ben is a Lithuanian who emigrated to Israel at an early age and served in the Israeli Defense Force. In true government fashion, because Ben was an accomplished concert violinist, the Israeli Army made him a supply sergeant.
He has taught at the University of Kansas for several years and has recently become an American citizen. He’s a good friend and a smart guy full of witty and accurate sayings, the one above being a favorite. Ben doesn’t know much about two-way radio or police communications — but he is “right on” about the new economy of wireless technology.
A better future
To be fair, I really do want (and expect) things to be better and cheaper in the future, especially communications systems and equipment for public safety users. So how do private radio system costs compare to commercial system costs? For the sake of discussion, I’ve made some basic cost assumptions:
- Typical ARPU for a commercial wireless phone is about $70 per month.
- A full-time user works 160 hours per month (40 hours per week 3 4 weeks).
- There are 720 shift-hours per month (24 hours per day 3 30 days per month).
- Hence, for each user billet on the schedule, there should be 4.5 monthly “costs” budgeted. This works out to about $315 per user per month in equivalent monthly costs or about $3,780 per year per radio user for the commercial service option.
For a police department with 25 sworn officers, this works out to about $95k per year just for backbone or network services not including user equipment costs. But the cost of commercial handsets is subsidized and each unit is sold for, let’s assume, only $100 for a product like the Nextel i1000. Typically, public safety users will need to replace these units at least four times per year for an annual fleet cost of another $10k. That brings the commercial system option up to $105k per year or $525k for a five-year life-cycle system cost. Ouch!
Predictions
Land mobile radios aren’t subsidized (quite the contrary from the Major Firm) and each unit is sold for, let’s say, $650. Let’s assume an effective life of five years for mobile and portable radios and that each department user has both products. Further, it seems fair that our private radio system won’t need nationwide coverage, so network design (and costs) can be reduced. Being wildly pessimistic, let’s assume that the backbone network components, including sites, radios, towers, communications links and maintenance for this small department, will cost $25k per year. At the end of the same five-year life cycle, the private radio system has cost only $157k — and we still own the gear.
Dave’s prediction of the obvious: “Big-picture” entrepreneurs will (some already have) devise a way to leverage the benefits of private radio systems into a monthly service with reasonable ARPU for public safety consumption without the periodic capital costs of system acquisition and construction. After all, when it comes to money, it’s just the amount we look at.
Dunford, MRT’s public safety consultant, is technical services consultant for the Lenexa, KS, Police Department. He is a member of the Association of Public-Safety Communications Officials — International. You can email Dunford at [email protected].
