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  Reply # 726419 3-Dec-2012 19:43
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sbiddle:
chevrolux:
sbiddle:
Behodar: Doesn't Telecom Wholesale still have a "monopoly" for customers served from cabinets and smaller exchanges? I know that ISPs are able to install their own gear but the impression I got is that it's not cost-effective.


It's not cost effective purely because of the small number of customers. A typical cabinet will serve ~288 premises, if you've got 10% of the market that's 28 customers. Factor in the cost of a ISAM/DSAM/MSAN and the cost of regulated backhaul (which is a rip off but the Commerce Commission set the pricing) and it's very obvious why this makes no sence if you're a business wanting to make a profit.


Doesn't Chorus own that gear? I thought Telecom Wholesale was no more. I also thought all providers can serve their customers out of a cabinet for the same price.


They can do. But the business case will never ever stack up.

if you look at my figures above the wholesale cost of the UCLL copper, space in the cabinet, and backhaul could easily cost somewhere in the vicinity of $1500 - $2000 per month depending on your backbaul requirements. These prices are fully regulated by the Commerce Commisson.

It doesn't take a rocket scientist to realise if you're paying $53 per month in wholesale costs (let alone the cost of the hardware), assuming you can get 28 customers, that there is no margin when at that price you can just use wholesale UBA.


Sorry not meaning UCLL type connections but just 'renting' a port (for want of a better/the proper term). Do all the providers not the pay the same price to use Chorus's ports. So while I understand it doesn't make sense to install ULL equipment in cabinets I can't see how it would be more expensive for 'Small Fry ISP' to provide DSL from a cabinet than it is for Telecom - obviously I don't really understand all the intricacies. 

I guess what I am trying to say to answer the OP's question is no, Telecom do not have anywhere near a monopoly.



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  Reply # 726447 3-Dec-2012 20:55
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Good chat gentlemen.

So if chorus rents to all providers on an equal footing, we have even competition apart from the fact that "telecom" both wholesales and owns 50% of the entity that brings the net here?





 


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  Reply # 726464 3-Dec-2012 21:15
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Behodar:
chevrolux: Doesn't Chorus own that gear? I thought Telecom Wholesale was no more.


freitasm: That's Chorus. There's no Telecom Wholesale.

Telecom Wholesale seems to still exist (either that or someone forgot to take their website down!) but after looking around it does look like the gear moved across to Chorus. I didn't realise that that had happened and I stand corrected.


Correct, Telecom Wholesale as a brand still exists to sell a whole range of other Telecom products - http://telecomwholesale.co.nz/products. The local loop and related broadband access was divested to the newly formed Chorus entity.

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  Reply # 726467 3-Dec-2012 21:22
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rossmnz: Good chat gentlemen.

So if chorus rents to all providers on an equal footing, we have even competition apart from the fact that "telecom" both wholesales and owns 50% of the entity that brings the net here?



Telecom doesn't wholesale the network. Chorus do. Telecom doesn't own anything on Chorus.

Telecom and Chorus were separated for some time before Chorus was offered on the NZX 23 November 2011.

So, just to make it clear: Telecom doesn't own Chorus.





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  Reply # 726472 3-Dec-2012 21:34
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chevrolux:
sbiddle:
chevrolux:
sbiddle:
Behodar: Doesn't Telecom Wholesale still have a "monopoly" for customers served from cabinets and smaller exchanges? I know that ISPs are able to install their own gear but the impression I got is that it's not cost-effective.


It's not cost effective purely because of the small number of customers. A typical cabinet will serve ~288 premises, if you've got 10% of the market that's 28 customers. Factor in the cost of a ISAM/DSAM/MSAN and the cost of regulated backhaul (which is a rip off but the Commerce Commission set the pricing) and it's very obvious why this makes no sence if you're a business wanting to make a profit.


Doesn't Chorus own that gear? I thought Telecom Wholesale was no more. I also thought all providers can serve their customers out of a cabinet for the same price.


They can do. But the business case will never ever stack up.

if you look at my figures above the wholesale cost of the UCLL copper, space in the cabinet, and backhaul could easily cost somewhere in the vicinity of $1500 - $2000 per month depending on your backbaul requirements. These prices are fully regulated by the Commerce Commisson.

It doesn't take a rocket scientist to realise if you're paying $53 per month in wholesale costs (let alone the cost of the hardware), assuming you can get 28 customers, that there is no margin when at that price you can just use wholesale UBA.


Sorry not meaning UCLL type connections but just 'renting' a port (for want of a better/the proper term). Do all the providers not the pay the same price to use Chorus's ports. So while I understand it doesn't make sense to install ULL equipment in cabinets I can't see how it would be more expensive for 'Small Fry ISP' to provide DSL from a cabinet than it is for Telecom - obviously I don't really understand all the intricacies. 

I guess what I am trying to say to answer the OP's question is no, Telecom do not have anywhere near a monopoly.


My point is really that unless you've got 50% + market share there is no case for sticking gear in cabinets because you'll never get close to building a case for an ROI.

On the other hand there is nothing preventing ISP's grouping together and installing kit to take on Chorus. The main stumbling block is the regulated backhaul cost that is seen as wildy excessive by many.



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  Reply # 726535 3-Dec-2012 23:13
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So telecom do not own chorus but the share holdings must be fairly alike given that they were formed from one company?







 


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  Reply # 726543 3-Dec-2012 23:35
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rossmnz: So telecom do not own chorus but the share holdings must be fairly alike given that they were formed from one company?



Telecom shareholders (i.e. the public) kept their existing TEL shares and were given CNU shares. The two companies are now about as as related as KFC and Tegal. 



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  Reply # 726546 3-Dec-2012 23:40
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Was amused to discover my friend (who works for Gen I) still on traditional telecom perks and with a telecom contract.

Things that make you go hmmmm.




 


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  Reply # 726549 3-Dec-2012 23:45
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rossmnz: Was amused to discover my friend (who works for Gen I) still on traditional telecom perks and with a telecom contract.

Things that make you go hmmmm.


Gen-i is wholly owned by Telecom. Gen-i staff are Telecom employees. Why wouldn't they get Telecom staff perks?

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  Reply # 726562 4-Dec-2012 01:18
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freitasm:
rossmnz: Good chat gentlemen.

So if chorus rents to all providers on an equal footing, we have even competition apart from the fact that "telecom" both wholesales and owns 50% of the entity that brings the net here?



Telecom doesn't wholesale the network. Chorus do. Telecom doesn't own anything on Chorus.

Telecom and Chorus were separated for some time before Chorus was offered on the NZX 23 November 2011.

So, just to make it clear: Telecom doesn't own Chorus.



I think in this he was referring to the Southern Cross cable as Telecom owns I believe 50% of the SCC company. Given that the majority of the cost of ADSL, at least relating to the cost of data, is the cost of the international data one could argue Telecom has a part monopoly on the price of international data through its stake in SCC.

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  Reply # 726566 4-Dec-2012 02:04
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rossmnz: Was amused to discover my friend (who works for Gen I) still on traditional telecom perks and with a telecom contract.

Things that make you go hmmmm.


Gen-I is a Telecom company.

You are trying hard to find malice where there is none.

I am wondering what is the real objective of this thread and I am locking it.





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