ISP Break-even and LTV Calculator

How to use this

1. Enter your cost and revenue numbers. Fill in your monthly fixed costs, per-subscriber variable cost, ARPU, monthly churn rate, and CAC. Use last month's actuals if you have them; the defaults are representative Kenyan ISP values.
2. Read the break-even and LTV panel. The calculator shows how many subscribers you need to cover fixed costs, your LTV per subscriber, and the payback period on each new customer.
3. Adjust inputs to model scenarios. Try raising ARPU by KES 200 or reducing churn by 1% to see how much the LTV:CAC ratio improves. The cohort decay curve updates live.

How it works

Unit economics start with the contribution margin per subscriber: ARPU minus the variable cost you incur to serve that subscriber each month. Once you know contribution, the other numbers fall into place.

Break-even is the subscriber count at which total contribution covers your fixed costs: ceil(fixed costs / contribution). Below this threshold you are subsidising operations from capital; above it you are profitable at the gross level.

LTV (lifetime value) is the expected total contribution a subscriber generates before churning. For a stable monthly churn rate the closed-form result is contribution / (churn% / 100): the standard geometric series at steady state². When churn is zero we cap at 60 months to avoid an infinite result.

Payback is how many months of contribution it takes to recover CAC: CAC / contribution. A payback under 12 months is strong for a Kenyan ISP; over 18 months and your cash position tightens with every growth push.

The cohort decay curve starts a notional cohort of 100 subscribers at month 0 and applies the churn rate each subsequent month. It is a shape diagram : use it to understand the decay profile and spot the CAC payback month, not to forecast absolute revenue.

In a Kenyan ISP context

The Communications Authority of Kenya publishes quarterly sector statistics covering ARPU, subscriber counts, and broadband penetration by technology¹. Fixed broadband (including FTTH and fixed wireless) ARPU has ranged from roughly KES 2,000 to KES 4,500 across operators and plans in recent reporting periods. Budget plans cluster around KES 2,000–2,500; premium unlimited plans target KES 5,000 and above.

Churn in Kenyan residential markets is shaped by two forces. Tenants in apartment blocks move frequently (estates in Eastleigh, South C, and Kikuyu report high annual turnover), pushing monthly churn toward 4–5%. Established ISPs with long-term business accounts or captive compounds see churn below 2%.

CAC varies sharply by channel. Door-to-door canvassing in a new estate, where the ISP is the only fibre provider, costs KES 1,500–2,500 per activation (mostly labour). Running paid Meta campaigns plus field sales in competitive Nairobi suburbs can exceed KES 6,000 once ad spend is divided by actual activations. An LTV:CAC below 3:1 in that environment is a warning sign that the unit economics do not yet support paid acquisition at scale.

FAQ

What is a healthy LTV:CAC ratio for a Kenyan ISP?

3:1 is the standard benchmark from SaaS finance. ISPs with long-lived subscribers and low churn regularly hit 8:1 or higher, especially when acquisition is referral-driven. Below 1:1 means you are losing money on every customer you sign up.

How do I measure monthly churn?

Divide the number of subscribers you lost this month by the number you had at the start of the month. Count voluntary cancellations and non-payment disconnects both: if the line goes dark, that is churn. Kenyan residential ISPs typically see 2–5% per month.

What is a typical CAC for a Kenyan ISP?

KES 2,000–6,000 depending on your acquisition channel. Referral-driven ISPs (word of mouth, tenant blocks) sit at the low end. Operators running paid Meta or Google campaigns with a field sales team are closer to KES 5,000–6,000 once you divide total spend by new activations.