Managing a Multi-Dwelling Unit (MDU) is a costly operation, which requires planning, patience, and coordination; with bills coming from any number of suppliers, public or private, ad hoc or monthly. Some expenses are the usual cost of doing business, but others can, sometimes, be turned into new lucrative opportunities. 

The key to unlocking new revenue streams lies in reimagining services for which you can add value. For heating, power and hot water, it goes without saying: the more a tenant uses, the more they cost. Charging a flat fee may reduce the complexity for the tenant, and return a profit when done properly. Parking and storage units add a hefty dose of convenience to the tenant, and additional revenue for the property. All of these options are widely known, but there’s another public utility that’s often overlooked: Internet access. 

In this blog, we’ll explore how MDU operators can not only enhance the resident experience but also open doors to substantial additional revenue, by shifting away from the conventional model of individual tenant subscriptions towards a managed, centralized Internet service.

Rethinking the Norm

Traditionally, tenants have been responsible for sourcing their own Internet services, resulting in considerable bandwidth wastage. We estimate that the average residential Internet connection is only used at about 10% of its full capacity. Imagine a 100-unit building, with tenants subscribing to an average plan of 100Mbps plans for $40 per month[1]: the collective bandwidth tallies up to a staggering 10Gbps, costing tenants $48,000 annually. However, a single 1Gbps connection could potentially serve the entire building just as effectively, because peak demand is not synchronous for all tenants. 

Seizing the Potential

Imagine not only slashing into this surplus bandwidth but also simplifying the lives of tenants by offering them Internet access just like any other utility. A paradigm shift towards a centralized and reliable Internet model offers a lucrative opportunity. Consider a 1Gbps connection, priced at around $70 per month[2] or $840 annually, as the foundation of this transformative strategy.

To safeguard against outages and accommodate peak traffic, integrating a secondary connection from a different provider brings the annual Internet expense to $1,680. The intricate task of managing dual connections, ensuring seamless failover during outages, and prioritizing real-time traffic like voice and video can all be effortlessly handled with SD-WAN or link balancing technology, such as the solutions offered by Adaptiv Networks, for as little as $6 per tenant per month[3].

SD-WAN is a great way of providing robust, high performance Internet access to tenants. By relying on two or more ISPs, the entire building is protected against network outage. If one ISP is offline, all traffic will be redirected to the ones that are active. 

Unlocking Revenue Streams

By delivering Internet access to tenants at the same price ($40 per month on average), this strategic shift would result in $48,000 in new annual revenue for the Operator, of which $39,000 would be profit. This additional revenue can be reinvested into property enhancements, saved for rainy days, used toward paying lenders, or passed on as savings to tenants, solidifying positive relationships. The options are limitless. 

The above example is a simple and straightforward scenario, but there are multiple other options to generate further revenue, for example offering high performance tiers at premium, or offering cybersecurity packages. 

Don’t know where to start? The first step is to team up with the right technology partner to help you navigate the wonderful world of network technology and connectivity. Reach out to Adaptiv Networks today to start planning the implementation of your next value-added service!