“From a CFO’s perspective, a TCO analysis like this would significantly help my decision-making. The engineer has the experience to best quantify the true benefits of a new transmitter purchase. This approach puts that expertise into a language I can understand and evaluate to make the right overall decision.”
-Darlene Fowlow, CFO & VP Finance, Nautel.
The photo above clearly illustrates how Nautel’s innovative transmitter design and smaller footprint can contribute to cost savings over the life of a transmitter. We have reduced the footprint of our 50 kW AM transmitter by 67% since the introduction of the Ampfet 50 (pictured above right) in the mid-80’s.
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Total Cost of Ownership
When it comes to justifying the cost of a major station upgrade to your CFO, GM or owner it helps if you can speak their language and demonstrate that you’ve done your homework. There’s a significant difference between the basic purchase price of something and its long term cost. Here’s a quick and simple explanation for calculating Total Cost of Ownership (TCO) for a new capital expense.
First, some background. TCO is a technique used to make sure that all associated costs over a given time period are considered when you’re acquiring a new asset. TCO not only reflects the costs of purchase but includes all other aspects in the further use and maintenance of that asset. While there is no broad accepted formula for TCO, the main thought is that you need to consider all relevant costs which are related to an asset. In some cases, we also refer to reducing costs (such as lower power consumption, elimination of replacement tubes or reduced maintenance).
Let’s take the example of a new transmitter. Typical cost elements might include:
To complete you own TCO, gather cost information on your present transmitter using the above cost elements, and compare them to your new transmitter. Be sure to check transmitter efficiency as part of the formula. Those who are air conditioning their sites in a closed-loop environment will want to add in additional efficiency savings due to the reduced cooling demand where applicable.
Discuss with your CFO any potential federal and state tax savings that adding the new equipment will create, and if other tax incentives may be applicable to further reduce the TCO.
If your existing transmitter has history of failures or if you see an increasing number of failures due to age, what is the cost of lost air time or potential reduced coverage when operating on a lower power backup transmitter? These costs are hard to calculate, but nonetheless, should be noted below your TOC argument, if applicable.
Total cost of ownership should be reflected over the anticipated life of the equipment as a main transmitter. Major market stations might utilize a 10-year replacement cycle for equipment, whereas smaller markets may plan 15 or even 20 years for their replacements.
How Nautel transmitters help lower your TCO
Nautel’s innovative transmitter design incorporates many features that provide for considerable cost savings over the life of a transmitter. Features like those listed below significantly lower your power and maintenance costs and repay the capital investment of a new transmitter in just a few years.
Additional Cost of Ownership Considerations
Every transmitter installation has its own peculiarities and some of these costs may be quite significant in your situation:
Read more for a detailed look at how power savings alone can easily amount to $500,000 – $1,000,000 over the life of a 50kW transmitter more>>