Australias NBN Business plan revealed

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ockel

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#73712 20-Dec-2010 14:52

Australians stand to get a basic hi-speed broadband service with a wholesale cost of $24/mth.
This will give them speeds of 12mbps down and 1mbps up. With a 70% uptake a massive 7% return will be earned.

By way of comparison the NZ NBN basic service will have a wholesale cost of $40/mth with 30/10.

Sixth Labour Government - "Vision without Execution is just Hallucination"

ockel

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#419468 20-Dec-2010 15:17

Full range of wholesale products revealed.

Sixth Labour Government - "Vision without Execution is just Hallucination"

wellygary

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#419476 20-Dec-2010 15:38

ockel: By way of comparison the NZ NBN basic service will have a wholesale cost of $40/mth with 30/10.

looking for a comparable OZ NBN product gives you between 30 and 34 $AUD, which between 40- 50 $NZD
so at least the pricing is relative, just a shame about the incomes... :D

NonprayingMantis

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#419483 20-Dec-2010 15:49

wellygary:
ockel: By way of comparison the NZ NBN basic service will have a wholesale cost of $40/mth with 30/10.

looking for a comparable OZ NBN product gives you between 30 and 34 $AUD, which between 40- 50 $NZD
so at least the pricing is relative, just a shame about the incomes... :D

just on a direct forex basis yes, but don't forget that Ozzie only has 10% GST, but NZ has 15%. Wholesale price excludes GST but the final retail price will include it, making the differnetial likely to be bigger.

Ragnor

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Trusted

#419497 20-Dec-2010 16:11

Swings and roundabouts... have you seen the cost of car registration and insurance in Australia!

ockel

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#419913 21-Dec-2010 12:32

Someone in Australia has had a crack at RETAIL pricing based on some assumptions and the indicated wholesale pricing.

The most basic service:
12mbps/1mbps with 100:1 contention ratio (or 135kbps/user)
Total wholesale cost $37/mth
Implied retail cost (with a 10% margin for the retailer) $54/mth (broadband only)

The fastest retail service scenario
50mbps/20mbps with 100:1 contention ratio (or 500kbps/user)
Total wholesale cost $63/mth
Implied retail cost (with a 10% margin for the retailer) $85/mth (broadband only)

Of course it begs the question for a retailer: would you be bothered getting out of bed for a 10% retail margin.

And of course, in the structure of the NBN, with TLS selling its customers and decommissioning copper there will be just one game in town. Take the price or find another [mobile only ???] solution.

Sixth Labour Government - "Vision without Execution is just Hallucination"

NonprayingMantis

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#419917 21-Dec-2010 12:44

most ISPs would be making far less than 10% margin right now, but basically that caluclation is ridiculous.

take the $85 one.

$85 less 10% GST = ~$77 revenue. if the margin is 10% then the total cost must be ~$70
If the wholesale cost *alone* is going to be $63 and then that only leaves $7 for backhaul, international capacity, customer service, sales commissions, etc etc, which seems incredibly low to me.

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ockel

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#419920 21-Dec-2010 12:50

NonprayingMantis: most ISPs would be making far less than 10% margin right now, but basically that caluclation is ridiculous.

take the $85 one.

$85 less 10% GST = ~$77 revenue. if the margin is 10% then the total cost must be ~$70
If the wholesale cost *alone* is going to be $63 and then that only leaves $7 for backhaul, international capacity, customer service, sales commissions, etc etc, which seems incredibly low to me.

I can only assume that the prices stipulated are pre-GST.
Breaking it down it includes $12 for SGA, $6 for national transport and $12 for international transport.

The "scale" operators with efficient systems at $12 cost to serve per customer..... seems skinny to me to. I cant recall what it looks like for the iiNet's and TPG's of the world but imagine that there must be some science in the analysis that they've done.

Sixth Labour Government - "Vision without Execution is just Hallucination"

ockel

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#419922 21-Dec-2010 12:56

And by way of comparison....

EBIT margins for the most recent financial year:

IINet 10.2%
TPG 17.9%

Sixth Labour Government - "Vision without Execution is just Hallucination"