More Background on KTEL

Posted on wrong substack a month ago

Here are some numbers for anyone that wants to make some estimates on the CA/EBB potential. The CEO isn't endorsing any forward looking numbers. The purpose of this is to give investors enough data to make their own estimates.

1. EBB current tribal customers

   1. Acceptance rate could be 70-85%

   2. About 5800 customers 

   3. $50 extra a month per customer.

   4. Total per tribal customer

      1. $5.25 (landline)+ $25 +$50 ($4.00 of the $9.25 is data so that drops off with the $50)=$80.25 per month

2. CA

   1. No EBB No tribal

      1. $9.25 +$14.85 (CA provides its own subsidy) = $24.10

   2. EBB No tribal

      1. $5.23 +$14.85 +$50 = $70.10 per month

3. Market potential

   1. 3.63M Eligible

   2. 1.95M currently on program

   3. 1.68M potential new customers

You can do your own market share number. 

Example:

1. 5% of 1.68M = 85K customers

2. $24.10 per month with no EBB

   1. $290 per year per customer

   2. $290 X 85K = $24.5M a year

3. Obviously with the extra $50 a month the numbers get very big. 

4. Gross margins are 50%+

5. Operating margins maybe 15%? no idea. .

6. Incremental margin on the $50 a month is almost 100% because the current customers are not anywhere near the GB limits o their current plan, so unlimited data won't increase traffic too much. Plus company can put limits on heavy users if needed. 

Source

https://www.usac.org/lifeline/resources/program-data/#Participation