NTT slashes its FTTH targets

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ockel

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Topic # 57981 3-Mar-2010 11:59

According to Nikkei Business Daily and Reuters NTT has taken its target of 30m homes with fibre down to 20m.

It has some 12m connections or 26% penetration despite passing 90% of homes. Seems like the overwhelming demand for fast internet since the network started rolling out in 2001 has forced NTT to change its targets.

It doesnt take an Einstein to work out that the profitability from 20m homes is significantly less than 30m homes. NTT shareholders must be jumping for joy at the capital deployed and the returns on that capital.

farcus

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Reply # 303941 3-Mar-2010 12:09

it's hardly surprising that people are not jumping to FTH as VDSL connections are available almost everywhere and extremely fast & cheap

NonprayingMantis

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Reply # 303943 3-Mar-2010 12:10

got a link?

ockel

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Reply # 303945 3-Mar-2010 12:14

NonprayingMantis: got a link?

http://www.eetasia.com/ART_8800484854_590626_NT_8ba182bc.HTM

https://www.communicationsdirectnews.com/do.php/120/39145?199

ariosto

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Reply # 303959 3-Mar-2010 13:03

farcus: it's hardly surprising that people are not jumping to FTH as VDSL connections are available almost everywhere and extremely fast & cheap

Except here in NZ, where VDSL is going to be charged as a "premium service" thanks to the Commerce Commission missing the bus on that particular service.

farcus

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Reply # 303968 3-Mar-2010 13:25

for example - with asahinet (very good isp)
for FTH you would pay the internet company 820yen p/m and NTT (phone company) 5460yen p/m (approx $100NZD )
Still not really a bad price.

But for a 48MB down 5MB up VDSL connection you pay asahinet 746yen p/m and NTT for the adsl line 2300 yen pr month for an unlimited connection (approx $50NZD)

NonprayingMantis

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Reply # 303972 3-Mar-2010 13:47

ariosto:
farcus: it's hardly surprising that people are not jumping to FTH as VDSL connections are available almost everywhere and extremely fast & cheap

Except here in NZ, where VDSL is going to be charged as a "premium service" thanks to the Commerce Commission missing the bus on that particular service.

OTOH, if ISPs were forced to provide it for the same price as ADSL, then who the hell is going to voluntarily put VDSL into an exchange, incurring massive costs for zero revenue benefit.

ockel

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Reply # 303977 3-Mar-2010 13:54

ariosto:
farcus: it's hardly surprising that people are not jumping to FTH as VDSL connections are available almost everywhere and extremely fast & cheap

Except here in NZ, where VDSL is going to be charged as a "premium service" thanks to the Commerce Commission missing the bus on that particular service.

Its funny - TelstraClear offers VDSL for a higher price - and thats purely access. Pretty much every market around the world seems to offer faster products at higher prices. Even max/max ADSL services were offered at prices higher than rate-limited versions.

I would say that the Commerce Commission got it very wrong in not differentiating between ADSL and ADSL2+ pricing. Something to do with greater utility for higher speed translating to a premium product and higher price. I seem to encounter it everywhere else (91/95 petrol), airfares (economy/premium economy/business class) but it seems that I should expect a better product in telecommunications for the same price.

ariosto

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Reply # 303994 3-Mar-2010 15:33

NonprayingMantis:
ariosto:
farcus: it's hardly surprising that people are not jumping to FTH as VDSL connections are available almost everywhere and extremely fast & cheap

Except here in NZ, where VDSL is going to be charged as a "premium service" thanks to the Commerce Commission missing the bus on that particular service.

OTOH, if ISPs were forced to provide it for the same price as ADSL, then who the hell is going to voluntarily put VDSL into an exchange, incurring massive costs for zero revenue benefit.

I'm not convinced there are "massive costs" associated with VDSL compared to ADSL2+ though. Certainly the equipment is more expensive, and a moderate increase in charges over an ADSL2+ connection is justified, but the "premium" descriptor implies we're looking at something more in the ballpark of the prices of a frame relay or a high end dedicated data circuit, rather than what really is the next step up the DSL ladder. If that happens, it's going to be a niche product, which will mean economies of scale will never come into play to bring the price down to a reasonable level for anything other than medium enterprises and above-which will mean it's a missed opportunity to increase broadband speeds for small businesses and residential consumers, who are the people most lacking these opportunities right now.

Given that VDSL also has a very limited distance requirement anyway, I just can't see how allowing Telecom to price the service beyond the reach of the people that most need it is going to help anyone.

ockel

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Reply # 304001 3-Mar-2010 15:59

ariosto:
NonprayingMantis:
ariosto:
farcus: it's hardly surprising that people are not jumping to FTH as VDSL connections are available almost everywhere and extremely fast & cheap

Except here in NZ, where VDSL is going to be charged as a "premium service" thanks to the Commerce Commission missing the bus on that particular service.

OTOH, if ISPs were forced to provide it for the same price as ADSL, then who the hell is going to voluntarily put VDSL into an exchange, incurring massive costs for zero revenue benefit.

I'm not convinced there are "massive costs" associated with VDSL compared to ADSL2+ though. Certainly the equipment is more expensive, and a moderate increase in charges over an ADSL2+ connection is justified, but the "premium" descriptor implies we're looking at something more in the ballpark of the prices of a frame relay or a high end dedicated data circuit, rather than what really is the next step up the DSL ladder. If that happens, it's going to be a niche product, which will mean economies of scale will never come into play to bring the price down to a reasonable level for anything other than medium enterprises and above-which will mean it's a missed opportunity to increase broadband speeds for small businesses and residential consumers, who are the people most lacking these opportunities right now.

Given that VDSL also has a very limited distance requirement anyway, I just can't see how allowing Telecom to price the service beyond the reach of the people that most need it is going to help anyone.

If you beleive that then how can TelstraClear justify its pricing?
http://www.telstraclear.co.nz/business/products/internet/biznet/index.cfm

This from Jan 2009:
TelstraClear launched their VDSL2 Service yesterday, currently available in 7 cities & going upto 14 by Christmas this year:

BisNet Speeds & Prices, taken from their website are as follows:

BisNet Gold 10Mbit down 2Mbit up - $49.95

BisNet Premium 15Mbit down 2Mbit up - $199.95

BisNet Supreme 30Mbit down 7Mbit up - $399.95

Data Costs: 1GB $2.95, 5GB $12.95, 10GB $19.95, 20GB $34.95 - Once you go over your initia Datal alotment, you automatically accumulate more, until the end of your billing cycle.

Current coverage is in Wellington, Hamilton, Tauranga, Napier, Wanganui, New Plymouth, Lower Hutt, parts of Auckland.

sbiddle

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Reply # 304071 3-Mar-2010 18:15

The problem with not charging a premium is that there is never a ROI on the hardware.

If you look over recent years Telecom were ripping out ADSL equipment before the equipment had even been depreciated in some cases. This was replaced with ADSL2+ equipment which is now in effect obsolete because new ALU ISAM line cards support VDSL, again before the product has been depreciated.

Upgrades are a tough game, especially if you're continually upgrading hardware that isn't cheap and in some cases may not have even paid itself off.

farcus

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Reply # 304119 3-Mar-2010 19:58

sbiddle: The problem with not charging a premium is that there is never a ROI on the hardware.

If you look over recent years Telecom were ripping out ADSL equipment before the equipment had even been depreciated in some cases. This was replaced with ADSL2+ equipment which is now in effect obsolete because new ALU ISAM line cards support VDSL, again before the product has been depreciated.

Upgrades are a tough game, especially if you're continually upgrading hardware that isn't cheap and in some cases may not have even paid itself off.

To be fair on this one . . . Telecom were extremely slow to switch to adsl2 so they should really have expected that the technology was going to become outdated reasonably quickly.