FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 20, 2001
METRICOM, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-19903 77-0294597
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
333 WEST JULIAN STREET
SAN JOSE, CALIFORNIA 95110
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (408) 282-3000
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements, within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, that are based on our current expectations about our
company and our industry. We use words such as "plan," "expect," "intend,"
"believe," "anticipate," "estimate" and other similar expressions to identify
some forward-looking statements, but not all forward-looking statements include
these words. Some of these forward-looking statements relate to details
regarding our potential future network deployment, with respect to future
capital and operating costs, our network's coverage and capacity bandwidth,
assumptions in our subscriber model, our strategy and our anticipated subscriber
revenues. These statements may raise implications regarding the future operation
of the Company's network. All of our forward-looking statements involve risks
and uncertainties. Our actual results may differ significantly from our
expectations and from the results expressed in or implied by these
forward-looking statements. Among other things, additional competition from
existing and future competitors may impact the market and our estimated network
capital and operating costs. Projections of deployment, electricity, rental and
communications costs are estimated based on current information as well as
certain assumptions which management believes to be reasonable at the time. In
addition to the factors set forth above, the economic,
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competitive, governmental, technological and other factors identified in
Metricom's filings with the Securities and Exchange Commission could affect the
forward-looking statements contained in this report. Except as required by law,
we undertake no obligation to publicly update any forward-looking statements to
reflect subsequent events and circumstances.
ITEM 5. OTHER EVENTS.
Metricom, Inc. (the "Company") provides the following information
regarding its high-speed Ricochet network and technology, including information
regarding (i) average capital and operating costs per square mile of its high
speed Ricochet network and (ii) the coverage area and bandwidth capacity of its
network's wired access points and poletop radios. The information below is
intended to provide supplemental information to that contained in the Company's
Form 10-K/A for the year ended December 31, 2001, describing the Company's
network and technology and its network deployment.
NETWORK CAPITAL AND OPERATING COSTS
The Company's capital costs for its high-speed network consist of the
cost of acquisition and installation of its poletop radios, wired access points
and network interface facilities. Depending upon population density, to
construct its network, the Company typically installs seven poletop radios per
square mile, one wired access point per ten square miles and one network
interface facility per 600 square miles (typically one or two per market).
Approximate average capital costs are as follows:
o $2,000 per poletop radio;
o $180,000 per wired access point; and
o $550,000 per network interface facility.
Based on the above averages, the average capital cost per square mile
of the Company's high speed Ricochet network is approximately $33,000.
The operating costs of the Company's high-speed Ricochet network
consists largely of rental and electrical fees for the poletop radios, wired
access points and network interface facilities and communication costs
(including costs for circuits and telecommunications services) for the Company's
wired access points and network interface facilities. Electric and rental fees
average approximately, $10 per month per poletop radio, $2,000 per month per
wired access point and $10,000 per month per network interface facility.
Communications costs average approximately $900 per month per wired access point
and $12,000 per month per network interface facility. As a result, average
operating costs are approximately $400 per month per square mile of the network
(based on the average distribution of network components set forth above). Based
upon these average capital and operating costs and assuming that the Company
receives average subscriber revenue of approximately $25 per month, the Company
believes that it would require a minimum of 16 subscribers per square mile to
cover its average operating costs, and, a minimum of 44 subscribers per square
mile to cover its average operating and capital costs combined. There can be no
assurance that these costs and other amounts will continue unchanged in the
future or be applicable to other locations.
NETWORK COVERAGE AND CAPACITY
Density of coverage, bandwidth and the nature of subscriber use are all
factors in determining subscriber capacity. Based on an average of seven poletop
radios per square mile and one wired access point per ten square miles, each
wired access point controls communications to approximately 70 poletop radios.
The Company typically installs 12 to 32 Ethernet radios, or microcells, per
wired access point.
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Since each Ethernet radio provides the equivalent of 1.5 128 kbps user circuits,
each wired access point has the bandwidth capacity to provide downstream data
transmission rates of 2.3 to 6.1 mbps. The Company's subscriber model assumes
(i) an eight-to-one ratio of paying subscribers to active subscribers, (ii) that
approximately 12% of all subscribers are using the network at any one time, and
(iii) that each subscriber downloads an average of 500 megabytes of data per
month. Based upon this model and the average coverage stated above, each wired
access point has the capacity to serve 100 to 250 active subscribers and 800 to
2000 paying subscribers. In addition, each poletop radio has the bandwidth
capacity to provide an average 176 kbps downstream data transmission rate.
Accordingly, based on the subscriber model above, each poletop radio has the
capacity to serve five to eight active subscribers to the network. However, no
assurance can be given that this information will continue unchanged in the
future or be applicable to other locations.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
METRICOM, INC.
Date: July 20, 2001 By: /s/ Dale W. Marquart
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Dale W. Marquart
Senior Vice President and General Counsel
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