Large labour cost in quote for fibre installation (NGA on request)

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lkj509

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Wannabe Geek

#269937 15-Apr-2020 21:14

I have recently been looking at network options in my rural residential, and after months of trying to contact someone at Chorus, our ISP came back with the following quote in terms of a fibre installation.

1: Cost of Build work: $142,640.21

2: Consigned Material cost: $35,660.05

3: GST value (15% of 1&2): $26,745.04

4: Total cost to customer including GST: $205,045.30

Does this seem like a fair estimate for a house that is only 1.2km out of fibre range? Chorus's justification was that the junction cable running along the main road is full and unable to be tapped into, and that they would have to trench to where their UFB build has ended. In their plans, the materials and installations include wire, a turning pit and a chamber. Does anyone know how any of this is actually calculated? Why am I paying $35,660 (not incl.) for fibre wire?

Not even mentioning the fact that a Chorus engineer himself said it would be an easy installation and probably around 20-30k when we were buying the house (in all fairness, he probably wasn't aware of the junction cable usage). Perhaps someone who works in the industry would have a better knowledge of where my money is going opposed to me, but roughly 1000 dollars per meter (not including gst and material cost) seems a bit out of proportion.

Edit: I should probably add that I'm ineligible for VDSL.

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#2462178 15-Apr-2020 21:28

your likely paying for equipment to be installed in the exchange too, because the current allocation of equipment wont have space for you.

your also paying for traffic control safety management plan etc which is required for health and safety. Council consent etc that's required to dig next to the road, the list goes on.

hio77

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Lizard Networks

#2462182 15-Apr-2020 21:34

when chorus do this, they don't just hand out a fibre and go ok done, they do a full installation of a Fibre pit, run all the conduit to it etc for customers.

there will also be some supplementation of the physical exchange equipment in there.

if you do indeed have the full plans, then they will paint a pretty clear picture.

i will admit that's one of the higher costs i've seen but it may actually not be too far of the actual cost.

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Any comments made are personal opinion and do not reflect directly on the position my current or past employers may have.

lkj509

5 posts

Wannabe Geek

#2462186 15-Apr-2020 21:43

hio77:

when chorus do this, they don't just hand out a fibre and go ok done, they do a full installation of a Fibre pit, run all the conduit to it etc for customers.

there will also be some supplementation of the physical exchange equipment in there.

if you do indeed have the full plans, then they will paint a pretty clear picture.

i will admit that's one of the higher costs i've seen but it may actually not be too far of the actual cost.

Jase2985:

your likely paying for equipment to be installed in the exchange too, because the current allocation of equipment wont have space for you.

That justifies the material cost, as they are creating 3 17x30" pits. What confuses me is why there is the substantial amount of 140k for labour.

chevrolux

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#2462191 15-Apr-2020 22:09

Because the labour rate is fairly high. Plus they sub the vast majority of the work out.

BUT, it's not exactly "easy" work, and requires significant investment in civil plant. So it's easy to understand how the labour cost gets up so fast

Edit: Fact is, if solid telco networks were easy to build, everyone would be doing it. And I dont see anyone else jumping in their diggers and ripping in fibre all over the place.

nztim

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#2462208 15-Apr-2020 22:55

Any WISP in the area? or are you within 1Km line of sight to someone with fibre?

These are much cheaper ways of doing this...

Any views expressed on these forums are my own and don't necessarily reflect those of my employer.

lkj509

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Wannabe Geek

#2462215 15-Apr-2020 23:08

chevrolux: Because the labour rate is fairly high. Plus they sub the vast majority of the work out.

BUT, it's not exactly "easy" work, and requires significant investment in civil plant. So it's easy to understand how the labour cost gets up so fast

Edit: Fact is, if solid telco networks were easy to build, everyone would be doing it. And I dont see anyone else jumping in their diggers and ripping in fibre all over the place.

No they wouldn’t, because companies have to bid on their role in providing fibre

Lastman

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#2462217 15-Apr-2020 23:10

chevrolux Edit: Fact is, if solid telco networks were easy to build, everyone would be doing it. And I dont see anyone else jumping in their diggers and ripping in fibre all over the place.

Across private land it’s easy and cheap to run fibre, get into the road reserve and it becomes administratively and financially very complicated, even excluding the connection/equipment side of things. Traffic management, permissions, liability, vehicle crossings etc.

Plus here you’re getting the “one off price” syndrome, which someone putting in a power connection will be familiar with, as opposed, for example, to something like the UFB where a whole network is built at once and you get economy of scale and competitive quoting.

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lkj509

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#2462218 15-Apr-2020 23:18

nztim: Any WISP in the area? or are you within 1Km line of sight to someone with fibre?

These are much cheaper ways of doing this...

No WISP, no LOS. I am 1.2km down a hilly road. Don’t know if you strictly mean line of sight, but I’m 140 houses down from the next address with fibre

Zeon

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#2462224 15-Apr-2020 23:54

For that price lease small pieces of land to setup wireless repeating stations back to your house lol. Maybe if you are willing to pay that much a WISP would do that process for you?

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Wheelbarrow01

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Chorus

#2462232 16-Apr-2020 02:09

It's worth pointing out that unless you have actually placed an order, the figure provided to you by your RSP will likely be an estimate only, based for the most part on a desktop scope conducted by a network planner. In my experience, some estimates are very close to the final quote and some are not.

To give you an example, I recently assisted an end user in the Coatesville area who wanted fibre to his new house. The estimate was circa $100k + gst which he was relatively happy with, so he proceeded to place an order to trigger the full design & quote process. As part of that, the network designers are actually sent out into the field to do proper measurements and work out precisely what materials and extent of labour are required to complete the job. In this example, the firm quote came in at circa $75k + gst... that's quite a difference.

I'm not saying this sort of wild variation will happen in your case, but it does happen. Chorus calculates these types of jobs on a cost recovery basis only - we don't add a margin so the cost provided on the quote really is what it costs Chorus to get the work done.

If you haven't placed a provisioning order with your RSP, all you will have been given so far is a rough estimate, however I can confirm either way if the OP flicks me a message with the address.

As others have alluded to, the term "labour" covers a myriad of things including (but not limited to) designer fees, council consent applications, NZTA permissions, traffic management, equipment hire, sub sub contractor costs, arborist reports for trees where the fibre is buried under the drip-line of those trees, road/footpath reinstatement, splicing, pit installation, and so it goes on.

As for phrases like "but I stopped a technician as he was driving past in his Chorus van, and he told me that it would be a simple job and shouldn't cost more than $x" - if I had a dollar for every time I've heard that or a similar line, I wouldn't be retired, but I'd have a few hundred bucks at least. Field technicians aren't network planners, designers or quantity surveyors - they simply do their job and claim payment for their time using cost codes, so they really don't have first hand knowledge of what the supply and installation of any particular network element really costs.

Oh by the way, the example I provided above was for a network extension of around 500-600 metres from memory. So double the distance and the price provided to you is probably not too far off (all other things being equal).

The views expressed by me are not necessarily those of my employer Chorus NZ Ltd

Jase2985

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#2462242 16-Apr-2020 07:14

lkj509:

What confuses me is why there is the substantial amount of 140k for labour.

where does it say labour on the info you provided? says cost of build work.

chevrolux

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#2462247 16-Apr-2020 07:57

Lastman:
chevrolux Edit: Fact is, if solid telco networks were easy to build, everyone would be doing it. And I dont see anyone else jumping in their diggers and ripping in fibre all over the place.

Across private land it’s easy and cheap to run fibre, get into the road reserve and it becomes administratively and financially very complicated, even excluding the connection/equipment side of things. Traffic management, permissions, liability, vehicle crossings etc.

Plus here you’re getting the “one off price” syndrome, which someone putting in a power connection will be familiar with, as opposed, for example, to something like the UFB where a whole network is built at once and you get economy of scale and competitive quoting.

So why isnt every rural landowner just trenching in their own fibre on private land and getting connected....
Because it's about waaaaay more than just a cable!!

Source: I work for a company who builds large scale telco infrastructure. I.e. UFB builds and backhaul cables

chevrolux

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#2462249 16-Apr-2020 08:01

lkj509:
chevrolux: Because the labour rate is fairly high. Plus they sub the vast majority of the work out.

BUT, it's not exactly "easy" work, and requires significant investment in civil plant. So it's easy to understand how the labour cost gets up so fast

Edit: Fact is, if solid telco networks were easy to build, everyone would be doing it. And I dont see anyone else jumping in their diggers and ripping in fibre all over the place.

No they wouldn’t, because companies have to bid on their role in providing fibre

Nope. Anyone can build a fibre network in NZ... they just dont because the economics of doing it are pretty sucky. A few companies got in early and have done well (Inspire Net for example). But note A FEW being the key words there.

GGJohnstone

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Master Geek

#2463268 16-Apr-2020 09:34

Do not do it.

It seems to me that you are being asked to stump up with the cost of works that may ultimately be shared by many users both along the added path to your place and future loads beyond which could be significant network extensions.

They are having you on.

chevrolux

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#2463270 16-Apr-2020 09:37

GGJohnstone:

Do not do it.

It seems to me that you are being asked to stump up with the cost of works that may ultimately be shared by many users both along the added path to your place and future loads beyond which could be significant network extensions.

They are having you on.

But there is no way to tell if this "extension" will get used by other properties. So Chorus have to assume just one user is going to use the network.

It's no different to how power companies approach rural installations.

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