Wednesday, October 22, 2008

Get Your Business Bandwidth Free

You know that telecommunications costs represent a significant budget item, even for small business owners. We've already discussed how you can potentially slash your costs in half by switching to lower cost providers. You can check voice and data line pricing here. But how about taking an even bolder step? Why not get your business bandwidth for free?

Hear me out before you click away. There is a way to do this that can give you the same professional quality of service you have now but at a net zero cost to your business. It's based on a real estate model that you are probably already familiar with. It's legitimate and it could potentially work for you.

Here's the principle. A friend explained it to me years ago when he was looking to find a new apartment. The owner of the apartment complex explained that he could rent a nice apartment for a certain amount each month. Or he could buy a fourplex and move into one of the apartments. The rent from the other three units would be enough to cover the mortgage payments in full. He would then be living there for free.

There are no doubt may real estate tycoons who have gotten their start this way. Many families after WWII found that they could afford to have their own homes if they bought a duplex and rented out the upper floor. In today's economic tough times we may be headed back to an era like this to make real estate affordable again.

But how does real estate strategy translate to, say, Internet connections? Basically you do the same thing that my friend was pitched. You order the service and a router. Then you become the local service provider and collect enough monthly fees to pay the line lease.

Let's take an example. You are in a small strip mall (or office building) with three other businesses. You would all like to have T1 line service if you can get it at an affordable price. In this case, we will assume that the line costs $500 per month on a 3 year lease that includes a managed router at no cost. You'll need four switched outputs, which may come with the router or can be added with an inexpensive Ethernet switch. Now you plug in network lines from the four businesses into the router or switch and charge your three clients $200 a month each for T1 service.

See what just happened? All four of you have T1 Internet access at 1.5 Mbps. The other businesses each pay less than half what it would cost to have their own T1 line. You pay nothing. In fact, you make $100 a month for your trouble since 3 x $200 = $600 per month.

This is called bandwidth sharing and it's something that apartment owners have been quietly doing for years. You are not limited to just four users on a T1 line. In fact, you can have as many as 25 casual users on a T1 and not be bogged down excessively. As long as you don't have a bandwidth hog who is doing something like constantly downloading video or running a streaming audio or video server, your service will be plenty zippy.

The figure of $500 a month that I quoted is not uncommon in metropolitan areas. I've seen lines go for under $400 in highly competitive markets or twice that or more in more sparsely populated areas. You'll need to get a T1 line service quote for your business location to get an exact figure.

Depending on how close your offices or shops are located, you may be able to just plug your T1 line into a wireless router and provide service without having to pull wires to your telecom closet.

You are also not limited to T1 bandwidth. T1 lines can be bonded to give you 3, 6, 9 or even 12 Mbps. Metro Ethernet is available from 5 to 50 Mbps over copper and up to 1000 Mbps over fiber optic cabling. That should be plenty for even the most demanding medical centers or architectural and design firms, advertising agencies, and even video producers. The principle remains the same: share the bandwidth and everybody gets a price break. You make out best of all, considering that your bandwidth is free.

Click to check pricing and features or get support from a Telarus product specialist.

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