Friday, January 11, 2008

Voice and Data for Multiple Dwelling Units

Owners of apartment buildings, known as MDUs or Multiple Dwelling Units, have a unique opportunity to provide telephone and Internet service for their tenants and profit by doing so.

In a way, the needs of an MDU and a medium size business are similar. Both have multiple users within a single structure who need voice and data communications. Management of both MDUs and businesses have the opportunity to provide these services with an economy of scale. For the MDU, that means offering the tenants an attractive price on their telecommunications services and still leaving room for profit.

Consider broadband Internet service. If individuals buy their own broadband services, they each pay a fixed price to the provider that doesn't depend on what their neighbors are paying. The same is true for telephone service. There's no economy of scale for the individual. But there is for the provider. The more people in a densely populated area that subscribe to a service, the less expensive per user it becomes and the more profit there is per user. This economy exists because the costs to connect users in close proximity is generally much less than if they are spread out in a neighborhood or city.

So, to make the profit you need to be the provider. Building owners and management have that edge. They can wire the building for phone and Internet, or even make wireless hotspots available. But don't the owners then have to pay for the phone and Internet services? Yes, but by buying in bulk the provider gets a price break.

Here's an example. Say your tenants are used to paying $45 a month for DSL or Cable Internet. It's not all that reliable, but it is broadband instead of poky dial-up. Instead, you can order a highly reliable T1 line that might go for $450, depending on your location. If you provided that T1 line to 10 users, you'd break even. But a single T1 line might support 25 or more users, depending on how many go online at the same time. In this case, the cost per user is $18 a month. Plus the building's office can be one of those users, saving the cost of separate service.

Do you have more tenants than 25? No problem. You can easily add T1 lines bonded together to support 100 or more users of the service. In major metropolitan areas, you can order Ethernet service that offers even higher bandwidths at better prices per Mbps.

You can see that there is profit potential in being the provider of services for your Multiple Dwelling Unit. MDUs also include townhouses and condos, where an association might decide to be the provider to offer its members great deals on service and make some profit too.

If you are in a position to take good advantage of voice and data service for an MDU, let our team of experts get you competitive quotes on T1 Internet service for your building.

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

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