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# 106134 18-Jul-2012 13:38
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For someone in the know - do Chorus charge ISPs more to deliver ADSL2+/VDSL2 services in specific areas?

i.e. if a customer is in city centre Tauranga, and another customer is in the suburbs - does the rate Chorus charge the ISP different or is it the same regulated rate across NZ?

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  # 657622 18-Jul-2012 13:42
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no.

HOWEVER, the voice component does change in price for some areas (there is one price for urban and one for rural).

this differential also applies to naked

so if the ISP is offering you broadband with voice or naked broadband, then some areas will be more expensive than others for the ISP to provide (and it is up to them whether they price their serices differently, or average them across the areas).

If the ISP is only offering broadband (and somebody else sells you the voice) then the cost is the same*


*backhaul might be more epensive depending on locaiton too, but that is more complex)(



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  # 657630 18-Jul-2012 13:52
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OK so to define my question further - Naked connections - may see some fluctuations in price from Chorus from area to area?

 
 
 
 


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  # 657632 18-Jul-2012 13:52
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NonprayingMantis: no.

HOWEVER, the voice component does change in price for some areas (there is one price for urban and one for rural).

I thought that was scrapped about six months ago, or am I mixing it up with something else?

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  # 657638 18-Jul-2012 14:06
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Behodar:
NonprayingMantis: no.

HOWEVER, the voice component does change in price for some areas (there is one price for urban and one for rural).

I thought that was scrapped about six months ago, or am I mixing it up with something else?


the comcom have suggested that they do want to average the charges accross urban/rural, but it hasn't happened yet (and might not)

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  # 657666 18-Jul-2012 14:38
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It depends entirely what you're asking because the answer is both yes and no. It might pay to be a little more specific with your question.

Most prices are regulated, but if you're talking about tail costs for an ISP using Chorus for backhaul it costs an ISP more to service a customer that's at the other end of the country from their handover point than what it does if a customer is in the same area.


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  # 657687 18-Jul-2012 15:02
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myfullflavour: OK so to define my question further - Naked connections - may see some fluctuations in price from Chorus from area to area?


If I recall correctly:

Chorus naked EBUA and VWS price are the same for all regions now (but can go up annually in line with inflation) but that only covers from the home/business to the first EAS (ethernet aggregation point).

Backhaul is required from the first ethernet aggregation point to where ever your handover point to your network is. Like biddle says this will be a variable cost if you use Tail Extensions because it depends on how many steps between the first EAS local to the home/business and your handover point.

You can use other products like p2p backhaul or another handover to another transit provider like FX networks and use their backhaul, you should be able to get pricing for that from your account manager(s) for those.

Handover fibre and connection depend on how much you need to buy for the number of customers you have.

If you are starting out with few customers you won't have the numbers to make it viable, better off starting off as a VISP (virtual ISP) using Maxnet, Orcon or others VISP offerings in that area and graduate to full ISP later.  This is what most new ISP's do.



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  # 657697 18-Jul-2012 15:15
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Right so ISPs advertising one price for a particular product (i.e. Snap with their ADSL2+ VDSL products) in reality have different costs associated with providing each connection, depending on the customers location? 

 
 
 
 


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  # 657793 18-Jul-2012 16:32
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One liner answer: DSL tail prices for ISPs do fluctuate, depending on where you handover and if an applicable rural fee is being paid already.

A bit more explanation.... :)

If you take a handover in Mayoral Drive (MDR) for example, a DSL tail within Auckland will be cheaper than a tail in say Invercargill.
Most ISP's average out the costs and offer a single price rather than get picky about it (it's not a huge difference in price).

If the tail is located in a rural location, a rural fee does apply. However if the tail is over POTS, the rural fee is already applied in the POTS line. This is similar to the line rental.



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  # 657809 18-Jul-2012 16:46
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myfullflavour: Right so ISPs advertising one price for a particular product (i.e. Snap with their ADSL2+ VDSL products) in reality have different costs associated with providing each connection, depending on the customers location? 


Larger ISP's will have multiple handover points regionally which will help even out the costs.

However, conceptually you have this model:

Customer premises > Phone Line > Cabinet/Exchange > Backhaul > Handover Point > Handover Connection > transit to your data center > ISP Network > ISP domestic/international transit

For naked ADSL2+ you'd ideally use:
EUBA0 without POTS for the first three items which is ~$xx per month per customer
EUBA Tail Extension for backhaul, there are 8 steps depending on distance between $x (none) and $x  per customer per month

Handover fibre and connection are not paid for per user, you basically buy what you need to service all your customers. Talking $xxx to $xxxx per month depending on number of customers, times by however many handover points you want to operate at. 

Transit back to your data center is up to you, could use FX Networks, Vector, Orcon, Telecom etc etc... expect $xxx to $xxxx per month depends on how much bandwidth you buy/need.

Domestic transit:
You need interconnection with either Telecom or Telstraclear as they don't peer but interconnect with each other so buy interconnection from one, another $xxxx per month most likley.

You need transit to APE or WIX where most hosts/ISP's peer, $xxx per month, hosting in APE/WIX $xxx per month.

International transit: Depends on number of customers and what contention ratio you want to run, $xxx to $xxxx or higher.

Then you have all your operating costs: Equipment (authentication servers, dns servers, mail servers, caching servers, proxy servers, traffic management services etc), staff wages/salaries, marketing/advertising costs.

From there you can project out your rough cost per customer which should be a downward sloping curve the more customers you add, until you have to upgrade handover or transit or hire more staff.

Hope that helps.

I'd suggest talking to a Chorus account manager to find out more eg: pricing, or talk to account managers at large ISP's who offer virtual ISP services like Maxnet or Orcon.





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