The scenario
An international commodities trading firm, transferring financial data from Russia to the United States, has branch offices at ten locations in Russia, each of which sends 1MB of data back to the U.S. per day.
The challenge
The firm needs constant, up-to-date transmission of information to remain competitive. The quality of Russian telephone lines is worse than the U.S. as is the quality of service and support. The expense of international phone lines and technical support is also an issue.
Courier advantages
The Courier’s high performance means that it is reliable when connecting even under the worst of line conditions and that it can deliver the data quickly. Higher transmission rates and the carrier loss redial feature mean lower expenses for line charges and less chance for failed file transfers. Greater reliability means fewer calls to technical support.
Assumptions
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Given the quality of the phone lines, we can expect any modem to encounter slowdowns. However, lab tests showed that the Courier maintains high transmission speeds even under poor line conditions with an average transmission rate of 22.9 Kbps for a consumer modems and 31.3 Kbps for the Courier.
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International calling rates vary according to carrier and service plan. We used $0.40 per minute as a representative rate for calls between Russia and the U.S.
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We will assume an average of one connect failure or lost carrier per modem per day. For modems without carrier loss redial, re-establishing the connection will take approximately ninety seconds. For the Courier with carrier loss redial, the connection can be re-established in 15 seconds.
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Technical support for international connections can be time-consuming and expensive. An expense of $100 per technical support incident is representative. For the consumer modems, we assume one incident per month requiring technical support for each modem. For the Courier, we assume half that frequency.
These ROI calculations compare the average monthly costs for a business using ten consumer modems versus ten Courier modems. An average month of 22 business days is used for the calculations.
Monthly costs for consumer modems
| Item | Cost | Amount | Total cost per month |
|---|---|---|---|
| Data calls | $0.40/min | 10 calls/day x 44.72 sec./call x 22 days | $65.59 |
| Failed connect/carrier loss | $0.40/min | 60 sec./incident x 10 incidents/day x 22 days | $96.80 |
| Technical support | $100/incident | 10 incidents/month | $1,000.00 |
| Total monthly expenses | $1,162.39 |
Monthly costs for Courier modems
| Item | Cost | Amount | Total cost per month |
|---|---|---|---|
| Data calls | $0.40/min | 10 calls/day x 32.72 sec./call x 22 days | $47.99 |
| Failed connect/carrier loss | $0.40/min | 15 sec./incident x 10 incidents/day x 22 days | $22.00 |
| Technical support | $100/incident | 5 incidents/month | $500.00 |
| Total monthly expenses | $569.99 |
Total cost comparison
| Item | Consumer modem | Courier modem | Difference |
|---|---|---|---|
| Modems (10) | $179.00 | $289.95 | $110.95 |
| Monthly phone line and maintenance charges | $1,162.39 | $569.99 | –$592.40 |
| First year expenses (Modem cost plus 12 months of operating expenses) | $14,127.68 | $7,129.83 | –$6,997.85 |
| Subsequent year expenses | $13,948.68 | $6,839.88 | –$7,108.80 |
| Total savings with Courier: | first year subsequent years |
$6,991.85 $7,108.80 |
While the consumer modems may save money in the short run, the greater speed and reliability of the Courier modem means that you save money every time you make a call.