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

Forums › New Zealand Broadband › Large labour cost in quote for fibre installation (NGA on request)

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#2463652 16-Apr-2020 17:21

nztim:

MikeAqua:

It is quite staggering that we have a model under which Chorus can: -

Require a user to pay a six figure sum for infrastructure to connect them to fibre,
Then get to own that infrastructure for $0.00,
Then get to connect other users,
Then charge ISPs to use the infrastructure,
All with no recompense to the user that originally paid for it all,
Some of those things in isolation would be reasonable, collectively they are a rip-off.

Your last point is where the problem lies, as other users come on board, the original person who funded the project should be compensated

better still

I think you are either in a area funded by the government or you are not, and if you can get fibre or not should be determined by that

So if a community, developer or individual want to pay for a fibre build they should not be allowed to? Why?

nztim

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#2463679 16-Apr-2020 18:24

Handle9:

nztim:

Your last point is where the problem lies, as other users come on board, the original person who funded the project should be compensated

better still

I think you are either in a area funded by the government or you are not, and if you can get fibre or not should be determined by that

So if a community, developer or individual want to pay for a fibre build they should not be allowed to? Why?

A community/developer is different from whats here..... one person paying for it and everyone else in the area getting it for free...

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

hio77

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#2463682 16-Apr-2020 18:30

nztim:
A community/developer is different from whats here..... one person paying for it and everyone else in the area getting it for free...

So because this is a single customer, chorus shouldn't build to standards that allow expansion?

I get it, it's a pretty crappy situation to be the leader that the sheep get a cheap payout off but if you were a network builder, what would you do in the same situation?

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#2463686 16-Apr-2020 19:01

hio77:
nztim:

A community/developer is different from whats here..... one person paying for it and everyone else in the area getting it for free...

So because this is a single customer, chorus shouldn't build to standards that allow expansion?

I get it, it's a pretty crappy situation to be the leader that the sheep get a cheap payout off but if you were a network builder, what would you do in the same situation?

Lets look at how it could work

If a single customer foots the original bill, as others come online they should be contributing.... lets say the the install is $240K paid by customer A

Customer B comes along and pays $120K which is reimbursed to customer A, Customer B pays any additional costs to get service to their property

Customer C comes along and pays $80k which $40k goes to Customer B and Customer A. Customer C pays any additional costs to get service to their property.

And so on and so on.... like the Natural Gas industry it just morally wrong for the first customer to foot the bill and everyone else freeload.

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chevrolux

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#2463703 16-Apr-2020 19:41

MikeAqua:
It is quite staggering that we have a model under which Chorus can: -

Require a user to pay a six figure sum for infrastructure to connect them to fibre,

Then get to own that infrastructure for $0.00,

Then get to connect other users,

Then charge ISPs to use the infrastructure,

All with no recompense to the user that originally paid for it all,

Some of those things in isolation would be reasonable, collectively they are a rip-off.

Its EXACTLY how the power distribution companies work... yet you dont see people winging and moaning about that.

People only complain about Chorus because Telecom used to connect a new property for $100 - pretty much regardless of what network build was required. NZers also dont see any value in internet service and the mindset is always "bloody Telcom always ripping you off". Its evident right down to home networks... people have no issue dropping $5k on a TV, but won't spend $500 on wifi/network equipment.

nztim

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#2463706 16-Apr-2020 19:47

chevrolux:

people have no issue dropping $5k on a TV, but won't spend $500 on wifi/network equipment.

this is so so true!

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Grunta47

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#2463743 16-Apr-2020 20:07

Handle9:

Zeon:

Let's say they got 50% of the 140 houses connected though, $50/month x 70 houses x 12 months = $42,000/year. Not sure on the upkeep costs but lets say 25%, so $31,500 on $200k investment - probably not bad in the infrastructure world??

While I don’t know I’d guess that you are looking at more like a 10% net margin. $4200pa on $300k investment (to connect 70 houses at $1300 each on top of the network build).

I think there is a fairly straightforward issue here. There are not 140 houses and this number is a typo.
Investing $250k to build network past 140 houses should be a no brainer, especially when outside plant networks have a 25 year depreciation rate. This roughly equates to $1,750 per house and the cost should be less for Chorus as they can ignore the GST. So you’re getting close to where this is a standard UFB build scenario.

As Wheelbarrow01 said, I have been in touch with the OP who gave me his address, and I note it is on a shared right of way with 7-8 other houses, and there are another 7-8 houses on the main road very close by.

Which means only 14 houses all told, not 140. This will also be why the other residents are not really interested in helping to fund this project. Being this is now more like a rural/lifestyle block area the cost of $1300.00 per house install would not apply as many of these would be non-standard/long runs from the new network to the house.

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#2463754 16-Apr-2020 20:22

nztim:
chevrolux:

people have no issue dropping $5k on a TV, but won't spend $500 on wifi/network equipment.

this is so so true!

Didn't you know? With everything going on Internet should be free. Its more crucial than power! /s

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Handle9

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#2463763 16-Apr-2020 20:44

chevrolux:Its EXACTLY how the power distribution companies work... yet you dont see people winging and moaning about that.

Lots of people whinge about it. They then go and price up off grid power and mostly the whinging stops.

Tracer

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#2463780 16-Apr-2020 22:07

chevrolux:

Its EXACTLY how the power distribution companies work... yet you dont see people winging and moaning about that.

People only complain about Chorus because Telecom used to connect a new property for $100 - pretty much regardless of what network build was required. NZers also dont see any value in internet service and the mindset is always "bloody Telcom always ripping you off". Its evident right down to home networks... people have no issue dropping $5k on a TV, but won't spend $500 on wifi/network equipment.

I've had a lot more people whinging about electricity than fibre.

GGJohnstone

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#2463809 16-Apr-2020 23:47

Silver lining: That the development of alternate trunking wizardry for this last mile delivery of service could bury the extortion with the decrepit copper and the fiber along with it.

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quickymart

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#2463843 17-Apr-2020 07:55

Bury the copper and the fibre and it's extortion? Again, sorry, I'm completely lost...

MikeAqua

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#2463849 17-Apr-2020 08:31

chevrolux:
Its EXACTLY how the power distribution companies work... yet you don't see people winging and moaning about that.

That's a rip off too. Have dealt with that in a business context. The assets that we were told were the 'bare minimum' required to meet that businesses needs are now somehow miraculously supplying three other businesses.

Mike

nztim

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#2463856 17-Apr-2020 08:38

MikeAqua:

chevrolux:
Its EXACTLY how the power distribution companies work... yet you don't see people winging and moaning about that.

That's a rip off too. Have dealt with that in a business context. The assets that we were told were the 'bare minimum' required to meet that businesses needs are now somehow miraculously supplying three other businesses.

its morally and ethically wrong with power/gas/telecommunication its all the same, the first person foots the bill and everyone after that taps in for free

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

PolicyGuy

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#2463970 17-Apr-2020 09:50

Handle9:

chevrolux:Its EXACTLY how the power distribution companies work... yet you don't see people winging and moaning about that.

Lots of people whinge about it. They then go and price up off grid power and mostly the whinging stops.

I have seen that one off-grid design-and-build company is advertising that their up-front estimate is

$10,000 per kWh installed capacity

So if you want a setup to support a Tesla Powerwall-2 battery (13.5kWh capacity), you're looking at the thick end of $135k
😮

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