What? No $10 Broadband

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Jama

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#9725 9-Oct-2006 08:46

Higher charges for 'broadband only' customers. TUANZ is troubled. ihug doing a complete u-turn. I thought we were being 'promised' $10 broadband.

Sounds like trouble in ISP land. This from Stuff

freitasm

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Geekzone

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#47972 9-Oct-2006 09:15

People don't understand that regulation is not the same as innovation.

geekiegeek

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#47991 9-Oct-2006 10:43

But the LLU supporters promised cheaper broardband with VoIP?

This has always been one of my arguments against LLU - who is going to upkeep the network if no one is paying for it. There is no such thing as truely naked DSL as there will always need to be a line charge component to cover infratsucture.

grant_k

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#47992 9-Oct-2006 10:59

Ihug signalled it might not offer customers Naked DSL when it launched a traditional phone line and Internet bundle with flat rate toll charges last month. Mr Rushworth says the company favours traditional Pots technology for voice services and DSL for Internet data.

Yeah, sounds like a lot of back-pedalling going on, considering how much iHug have been lobbying to get Naked DSL.

"Naked DSL – going nude – doesn't really help because you are still reliant on Telecom's network, so any VoIP solution over it is going to be pretty marginal in terms of latency. And when the power goes out, which it does in Auckland every five weeks, you suddenly don't have a phone."

5 weeks is a huge exaggeration, although the power supply in Auckland definitely is less reliable than in other "first world" cities. This is just a crock though because you can always use your cellphone for occasional emergency backup.

Heck, out in the boonies where we are, power failures are a regular occurrence, so we have our own generator down in the barn. Several times I've had to use it to power my whole office during a business day. Aucklanders don't have it that bad really.

And it's also not true to say that VoIP is pretty marginal over Telecom's network because of latency. I use it every day for business calls and most people don't realise I'm not talking to them over a landline. Everyone knows that VoIP is the way of the future so to say that: "the company favours traditional Pots technology for voice services" is pretty lame I reckon.

Cheers,
Grant.

cyril7

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#47993 9-Oct-2006 11:02

So does anyone know what Telecom claim it costs to maintain the copper from the switch to your home? What would break down as to the cost components:

- Rental of the physical pair itself (amortised over its usefull life (aoul))
- Land/trench/pole/cabinet access for that pair aoul.
- Supply of battery current per month (not required for DSL but here for reference).
- Monthly Maintenance supply charge that covers repair or replacement if damaged.

So what else is there, and what costs do folk think get attached to these? I have no idea of the exact costs, but it would be good to get a handle on it?

Cyril

geekiegeek

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#47995 9-Oct-2006 11:28

Exchange rental.

And do we go user pays and start charging more for users in coastal or damp areas where there is more corrosion and damage?

You would also need to have money set aside for disasters such as floods, high winds etc.

sbiddle

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#47998 9-Oct-2006 11:42

Here we go yet again discussing all the problems forced upon us by the Kiwi Share / TSO.

The TSO should be dumped immediately and we'll all be better off.

cyril7

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#48001 9-Oct-2006 11:47

Hmm, I probably should have made the trench/pole/cabinet include buildings, as under LLU does not the exchange provide us with nothing other than cabinet service, essentially they are providing you with a pair from the MDF to the demarkation point on your home. Depending on which provider you go with depends on what gets connected to that pair, the monthly maintence component contributes toward ongoing maintenance and re-establishment if destroyed.

I agree whilst the Kiwishare may have made the more established part of the community feel comfortable that they would always get a service as existed, it is limiting things as we move forward.

Cyril

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GEOMAX

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#48029 9-Oct-2006 14:19

the cost of the unbundled local access plant will probably be based on a return on investment plus upkeep costs..Typical capital costs for plant works out at about 80% for outside plant and 20% for inside (exchange) equipment.This means your $50 monthly Telecom bill is probably made up of $40 for local loop and $10 for exchange equipment.(Telecoms profits come from the valuec added services like tolls etc) . Allowing that these are average costs I think there is going to be a lot of very disappointed people around when prices are announced.

grant_k

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#48030 9-Oct-2006 14:24

GEOMAX:
Telecoms profits come from the valuec added services like tolls etc.

That can't be the whole story because otherwise how would they make money from the many subscribers who have switched their toll calls to other providers?

The local loop is a huge cash cow for Telecom which is why they have been fighting so fiercely to keep it...

Cheers,
Grant.

GEOMAX

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#48039 9-Oct-2006 15:30

Telecoms annual report shows declining access and toll revenues and increasing mobile ,data, and Internet revenue so I doubt if they they make anything from many customers. more info at this URL

http://www.telecom-media.co.nz/releases_detail.asp?id=3338&page=3&pagesize=10&filtertext=&m1=7&y1=1996&m2=10&y2=2006&filter=filter

note that local service revenue is about 20% of total revenue and declining

grant_k

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#48042 9-Oct-2006 15:39

GEOMAX:
Telecoms annual report shows declining access and toll revenues and increasing mobile ,data, and Internet revenue so I doubt if they they make anything from many customers. more info at this URL

http://www.telecom-media.co.nz/releases_detail.asp?id=3338&page=3&pagesize=10&filtertext=&m1=7&y1=1996&m2=10&y2=2006&filter=filter

note that local service revenue is about 20% of total revenue and declining

Thanks for that link Geomax, yes I see what you mean.

However, those reports seem to concentrate on Revenues for each division whereas the more important factor is Earnings i.e. contribution to the bottom line Profit or EBITDA. What would be REALLY interesting would be to see the EBITDA results for each of those divisions listed separately...

Some would say that Telecom's accounts do not reveal the whole picture, hence the calls for operational separation. I guess we won't really know the true cost of providing the local loop until the Commerce Commission finish their determination, that is assuming they get it right...

grant_k

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#50115 28-Oct-2006 22:43

GEOMAX:
Telecoms annual report shows declining access and toll revenues and increasing mobile ,data, and Internet revenue so I doubt if they they make anything from many customers...
note that local service revenue is about 20% of total revenue and declining

Brian Gaynor has today published the figures I needed to back up my assertion as to why the Local Loop is a "Cash Cow" for Telecom. Even though the REVENUE from this service is only 20% of the total, it's the PROFIT (ebitda) MARGIN that tells the full story:

Telcos tend to protect their telephone network operations for as long as possible because they produce higher margins and usually require less capital expenditure than other parts of their business.

Telecom is a classic example of this, as it generates an ebitda margin of nearly 60 per cent from its fixed-line business - one of the highest margins in the world - but a much slimmer 35 per cent margin from its mobile operations.

Telecom's overall ebitda margin (excluding its AAPT operations in Australia) was 49.3 per cent in the year to June, compared with 42.1 per cent for Telstra and a mean of 40 per cent for 45 of the world's largest telcos.

Telecom was too protective of its public switched telephone network business and too slow to invest in broadband. As a result it has been hit with draconian regulations that are forcing it to make substantial investments in broadband.

"Slow to invest in broadband" doesn't really do it justice...

FINALLY this week we have Full-speed ADSL again. The same line speed is now available in 2006 as it was in 1999 when I first got ADSL. The only difference is the price.

Other countries have meanwhile moved on to ADSL2+, but we are stuck with the same speed that we had 7 years ago (an eternity in terms of IT development).

If more of that 60% profit from the fixed line business had been invested into a decent backhaul system over the years instead of being paid out as dividends to (mostly offshore) shareholders, we would now have the infrastructure to support this weeks "Unleashed Broadband".

As it is, Telecom's underinvestment has this week been exposed for all to see with the very poor peak-time performance of most of these newly "unleashed" ADSL connections.

KuriKai

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#50134 29-Oct-2006 01:05

I do not know why they do not release a 64k dsl plan for $10 per month. then the isp's could entice the customer to pay more for greater speeds.

tonyhughes

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#50152 29-Oct-2006 13:03

KuriKai: I do not know why they do not release a 64k dsl plan for $10 per month. then the isp's could entice the customer to pay more for greater speeds.

Because too many people would just pay the $10 and put up with slow speeds to get the 'always on' advantage of ADSL, and no one would be on dialup, and very few on higher plans.

GEOMAX

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#50162 29-Oct-2006 15:01

Grant, Telecom is to spend billions of dollars replacing all the existing network with a new generation of equipment. This means that most of the DSLAM equipment used for DSL provisionng wiil be obsolete. (I understand the data separation will be done within the new switches) .I also saw an article recently (I cant find it at present) where it was estimated that Telecom would need 1,500,000 customers paying $150 per month to pay for it. To me this means that money spent now will possibly be scrapped before it pays for its self and a miracle has to happen for them to make a profit in the future. I cant conceive $10 Broadband or me paying $150 per month in the future but it must be an exciting future ahead....only time will tell. Cheers,George