ADR 0006: Tiered Service Pricing & Payment Logistics
Date: 2026-03-15 Status: ACCEPTED (architecture) / ASPIRATIONAL (specific tier prices) — see ADR 0008
Reset banner (2026-05-08): The 3-tier structure (LoRa / managed cellular / managed satellite, with cycle-aligned pricing) is the live pricing architecture. The specific dollar amounts below ($6 / $12 / $18 per year) are aspirational pending real cost data from COTS-based MVP deployments — they were derived from BOM and connectivity assumptions that the May 8 reset put on hold. See ADR 0008. Treat the numbers below as targets to validate against, not commitments to honour.
Context
Mass adoption of livestock telemetry requires a pricing model that aligns with the razor-thin margins and specific cash-flow cycles of extensive ranching. A flat per-animal/per-year fee fails to account for the dominance of the Slaughter Beef sector (>90% of Mercosur inventory), where assets are managed in 18–36 month productive cycles, and for the operational reality that ranchers handle herds in twice-yearly events (vaccine campaigns), not monthly.
The broader financial model — funding ladder, BOM scaling, 5-year ARR projection — lives in docs/70_internal/financials/strategic-economics-blueprint.md and the livestock-economics-model.xlsx workbook. This ADR captures only the pricing-model decision.
Decision
1. Three-Tier Service-Fee Model
Annual service fees are tiered by connectivity strategy, aligned with biological cycles:
| Tier | Connectivity | Annual Fee | Strategy |
|---|---|---|---|
| Tier 1 | Local LoRa (rancher-managed backhaul) | $6.00 / yr ($0.50/mo) | Rancher provides and maintains the LoRa gateway. |
| Tier 2 | Managed Cellular (LTE-M / NB-IoT) | $12.00 / yr ($1.00/mo) | Standard JAAB-managed terrestrial uplink. |
| Tier 3 | Managed Hybrid (Satellite NTN) | $18.00 / yr ($1.50/mo) | Premium NTN backhaul via Monogoto / Sateliot. |
2. Payment Logistics — Semester Billing, Pre-Paid Baseline
- Pre-paid is the baseline price (lowest friction, lowest admin cost, fastest BOM recovery).
- Lease (OpEx) is offered as a premium (~30% over pre-paid) reflecting the cost of capital, credit risk, and unrecoverable-hardware risk in extensive pastures.
- Monthly billing is rejected — collection overhead is prohibitive at extensive-ranching scale. Lease payments align to semester (twice-yearly) handling events.
| Financial Model | 36-mo Total | 60-mo Total | Notes |
|---|---|---|---|
| Pre-Paid (Baseline) | $72.00 ($2.00/mo) | $105.00 ($1.75/mo) | Lowest friction. Recovers <$20 BOM in semester 1. |
| Lease (Premium) | $93.60 ($2.60/mo) | $135.00 ($2.25/mo) | Semester payments only. ~30% premium. |
3. Competitive Reconciliation
The tiered model is positioned against direct-to-satellite competitors:
| Solution | 18-mo (Fattening) | 36-mo (Standard) | 60-mo (Breeding) | Critical Limitation |
|---|---|---|---|---|
| TuVaca (Tiered) | $40.50 | $72.00 | $105.00 | Cycle-aligned, fully mobile |
| Mobiltrack (UY) | $180 | $180 | $300 | 3-yr min commitment |
| Ceres Tag (AU) | ~$350 | ~$350 | ~$700 | EOL at month 36 (HW replace) |
| 701x (US) | ~$62 | ~$86 | ~$118 | Cellular/sat hybrid, infra-dependent |
| CowPro (ES/UY) | ~$75 | ~$80 | ~$90 | Fixed LoRa gateway dependency |
Consequences
- Cycle-aligned revenue. Fees match the 18 / 36 / 60-month productive cycles of slaughter, standard, and breeding herds — no unused-service waste in short-cycle scenarios, no hardware-loss risk in long-cycle ones.
- Cash-flow positive from day 1. Pre-paid baseline recovers the <$20 Member-node BOM in the first semester payment cycle.
- Risk shift to client. Pre-paid bias moves hardware-loss risk to the rancher; lease premium covers the residual cases where JAAB carries that risk.
- Aggressive ~$20/head/year 3-yr TCO target. Achieves 60–80% undercut of direct-to-sat competitors while preserving >60% gross margin per the strategic-economics-blueprint.
Notes
- Hardware BOM detail (Member ~$26.75, Leader ~$79.40, Bolus ~$24.00 at 250k+ volume) and the 5-year scaling roadmap are documented in the Strategic Economics Blueprint and the xlsx model — they are inputs to this pricing decision, not part of it.
- Tier connectivity choices (LoRa, LTE-M/NB-IoT, NTN) are governed by ADR 0005 — Hybrid Connectivity Strategy.
- The previous version of this file ("Strategic Economic Blueprint: The $60M Livestock Roadmap") bundled the pricing decision, the funding ladder, and the full BOM model into one document and contained a corrupted "[ABANDONED]" header buried mid-file. The funding/BOM content now lives exclusively in the blueprint and the xlsx; this ADR is scoped to the pricing decision only.