FTTH Pricing expectations

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icepicknz

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#62238 2-Jun-2010 07:12

So I had a look at vectors website as I knew they had fiber close to me but a few years ago it was well over 2Km's away... Due to the heavy advertising they have been doing about trying to win a piece of the pie for the $1.5 billion, so I checked my address again, and guess what, there is fiber running past my door, so I emailed vector.

Vector advised there was fiber running past my door (this is residental location which school at the end of the road) and I should speak to a provider such as Orcon, to which I got a call from Orcon shortly after. It seems that no residential pricing is available and the cost of the fiber alone is $2400 odd per month for 100mb, that's without anything connected to it, point to point to sky tower or where ever. I don't mind paying a $3k install fee to get it into the house, but then I don't want to be paying much more than $300-$400 for this service.

My question is what will the pricing likely be for FTTH. Seeing as vector already have fiber going past my door, why cant they offer me broadband on it like they advertise on TV and billboards? Is it expected that fiber will be available country wide (or 75% or whatever) so long as people want to pay $2400 a month for broadband?

Seems a little silly of vector not offering broadband to people where they already have fiber and still trying to get a chunk of the pie from the government. What does the govt expect FTTH prices to be?

Barry Murphy
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#337228 2-Jun-2010 07:38

Xnet has a home fibre service, $99/month plus $1.02/GB. It currently has a 30 Mb/s limit though. Personally I'd happily pay that if there was fibre here!

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ockel

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#337233 2-Jun-2010 08:07

Similarly there are retail offerings in Northland too. These are similar to the Fusion product mentioned in the previous post. Some of this appears to be set by the wholesale provider but also its a function of demand.

The NBN Implmentation Study in Australia also talked about pricing. A wholesale price of $30/mth for a product similar to DSL was indicated as a scenario.

Essentially its a chicken/egg situation. No demand by consumers means that ISP's are unwilling to offer a high speed product - etc etc.

TelstraClears VDSL pricing (and the WarpSpeed pricing for consumers) might give you an idea of where a higher spec'd product might sit from a retail perspective. But unless FTTH is offered at low wholesale prices (relative to copper) then migration from copper becomes less attractive to the masses. And if prices are set low then that means low returns for the "profit oriented" Local Fibre Companies being established.

Usual story though - early adopters that are willing to pay extreme prices (relative to the late majority) will be able to get a product. But it could feel like a nose bleed to start with.

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icepicknz

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#337235 2-Jun-2010 08:15

If you were in country (i see you're in the US??) and in auckland you'd see all the advertising billboards and tv adverts from vector pushing to win the broadband bid. They compare our current broadband speeds to a straw, i.e. a hosepipe trying to clean your car, the size of a straw, etc.

I'd think if vector wanted to offer broadband to the reseidential, or at least the fiber part (not the actual data) that they would start now where they already have network going past peoples houses. I'm all a little concerned at how they are trying to win the broadband funding where they charge $2400 for 100mb p2p circuit where even telecom, telstra and citylink are cheaper.

At first I supported vector to get the funding thinking I didnt have fiber in the area, however now knowing that I do already have or can get FTTH with a simple install fee, makes me want to choose another cheaper player, or at least one that would accept customers early on in the game (like these xnet plans) where they already have their fiber in the ground. Just shows that they're not in it to give cheaper faster broadband, rather to extend their fiber network using our tax paid money.

Barry Murphy
ISPMap - New Zealand ISP map
Vibe Communications LTD - Business ISP and Wholesale Carrier

Any comments made by myself don't reflect the views of my employer, they are mine and mine alone

ockel

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#337237 2-Jun-2010 08:20

Lets add some recently announced FTTH plans in Tasmania.
Bear in mind that there is no wholesale pricing between the FTTH builder and the ISP at this stage in Tasmania.

Exetel offers 3 variants on an access/download basis (ie no included data in the plan):
A Up/down 25 mbps/1 mbps Access $10.00 Download $1.50 per GB
B 50 mbps/1 mbps Access $25.00 Download $1.00 per GB
C 100 mbps/ 1 mbps Access $50.00 Download $0.75 per GB

Primus offers home/fast/extreme variants at 25/50/100 Mbps down.
The Xtreme plan with 300Gb data (80 peak/220 off peak) will set you back $120/mth.

It'll help put things in perspective for NZ.

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icepicknz

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#337241 2-Jun-2010 08:30

ockel: Lets add some recently announced FTTH plans in Tasmania.
Bear in mind that there is no wholesale pricing between the FTTH builder and the ISP at this stage in Tasmania.

Exetel offers 3 variants on an access/download basis (ie no included data in the plan):
A Up/down 25 mbps/1 mbps Access $10.00 Download $1.50 per GB
B 50 mbps/1 mbps Access $25.00 Download $1.00 per GB
C 100 mbps/ 1 mbps Access $50.00 Download $0.75 per GB

Primus offers home/fast/extreme variants at 25/50/100 Mbps down.
The Xtreme plan with 300Gb data (80 peak/220 off peak) will set you back $120/mth.

It'll help put things in perspective for NZ.

As far as I'm aware locally the fiber provider is layer 2 only, no data cap, this is done by the ISP providing the service, so essencially dark fiber with one color wave length, or 100Mb minimum ethernet

Barry Murphy
ISPMap - New Zealand ISP map
Vibe Communications LTD - Business ISP and Wholesale Carrier

Any comments made by myself don't reflect the views of my employer, they are mine and mine alone

ockel

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#337242 2-Jun-2010 08:30

icepicknz: If you were in country (i see you're in the US??) and in auckland you'd see all the advertising billboards and tv adverts from vector pushing to win the broadband bid. They compare our current broadband speeds to a straw, i.e. a hosepipe trying to clean your car, the size of a straw, etc.

I'd think if vector wanted to offer broadband to the reseidential, or at least the fiber part (not the actual data) that they would start now where they already have network going past peoples houses. I'm all a little concerned at how they are trying to win the broadband funding where they charge $2400 for 100mb p2p circuit where even telecom, telstra and citylink are cheaper.

At first I supported vector to get the funding thinking I didnt have fiber in the area, however now knowing that I do already have or can get FTTH with a simple install fee, makes me want to choose another cheaper player, or at least one that would accept customers early on in the game (like these xnet plans) where they already have their fiber in the ground. Just shows that they're not in it to give cheaper faster broadband, rather to extend their fiber network using our tax paid money.

I was recently back in the country - and I have seen both the Vector advertising and the more recent but more opaque Chorus advertising.

Personally I think using water is a bad analogy. You can get water in any quantity you like but if you want superfast high volume water then you'd better be prepared to pay for it. As someone who recently had a mains leak for a relatively short period of time it showed that if I left a tap running full power 24/7 then I could run up $000's of worth of use. I dont think the NZ public expects thats what they'll get with Vectors fibre so we'd better beware our expectation.

The builders of the new FTTH (or FTTK more accurately) are going to be paid to build it past the home irrespective of whether there are any connections or not. Thats a nice place to be. Vector already have a partially Govt funded fibre network past North Shore Schools. You'd have to contact the ISP's to find out the pricing and uptake for those schools. But I'd agree with your opinion that Vector is aiming to get Govt (tax funded) money to extend their fibre network.

Another example is Extend in Christchurch. Previous threads have lamented the cost of connecting a business to that network (owned by Chch City Council ultimately). Their pricing for access is $195/mth (I think) for a 1Gbps connection. ISP (including data charges) would be in addition to this.

At the moment it feels like a propaganda war to make households aware of Fibre, that its a service that they want without the household really understanding what they want it for or how much it will cost.

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sbiddle

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#337505 2-Jun-2010 19:39

Wholesale pricing and install costs are two totally different things.

Expect an average install to be in the $1000 - $2000 cost depending on exactly what's required. Who's going to pay that? It's a question that remains unanswered.

It's ironic that Vector won't actually answer any of the "tough" questions like this. They're happy to talk up their capability to offer a service but not talk about the finer details.

Screeb

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#337590 2-Jun-2010 22:07

sbiddle: Wholesale pricing and install costs are two totally different things.

Expect an average install to be in the $1000 - $2000 cost depending on exactly what's required. Who's going to pay that? It's a question that remains unanswered.

It's ironic that Vector won't actually answer any of the "tough" questions like this. They're happy to talk up their capability to offer a service but not talk about the finer details.

How many times do I have to spell this out to you? How can you possibly hope to predict prices 8-10 years into the future? The worst part is you aren't even doing that - you're just making up a figure. Xnet's FTTH costs $199 to install. Exactly how or why would the nationwide fibre cost 10 times that? 8 years from now, no less - at which point Xnet's is sure to be even cheaper. I can't find Exetel's fibre installation cost - but it should be telling that it's currently free until July (which is why I can't find the usual price I guess).

ockel

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#337634 3-Jun-2010 05:30

Screeb:
sbiddle: Wholesale pricing and install costs are two totally different things.

Expect an average install to be in the $1000 - $2000 cost depending on exactly what's required. Who's going to pay that? It's a question that remains unanswered.

It's ironic that Vector won't actually answer any of the "tough" questions like this. They're happy to talk up their capability to offer a service but not talk about the finer details.

How many times do I have to spell this out to you? How can you possibly hope to predict prices 8-10 years into the future? The worst part is you aren't even doing that - you're just making up a figure. Xnet's FTTH costs $199 to install. Exactly how or why would the nationwide fibre cost 10 times that? 8 years from now, no less - at which point Xnet's is sure to be even cheaper. I can't find Exetel's fibre installation cost - but it should be telling that it's currently free until July (which is why I can't find the usual price I guess).

Exetels installation price was either A$195 or A$145. One of the joys for Tasmania is that NBNCo is waiving charges for wholesalers at present (to my knowledge) as part of the rollout for the Govt.

However the major difference between Xnet (or Exetel or Primus or iiNet) etc etc is that they are offering connections in what is already a greenfields fibre area with existing home wiring (and likely an ONT) already in the premise because that was the requirements as a fibre-only subdivision. And thats what we should expect pricing to be in 8-10 years when its just a truck roll for a connection - much like we pay for a MAC for a copper line these days. This compares to Vector (or whoever) that has to do a fibre roll/drop plus CPE to an existing copper-served home. In that case it will cost $1000-$2000 even in 8-10 years IMHO. The direct analogy is to ask yourself what the cost of adding a new (or extra) copper line (or gas or undergrounding your overhead telephone connection or any other utility) at the moment. Vector or Telecom or a third party will still quote you $1000-$2000 today for an extra utility thats not fibre.

So in essence sbiddle is correct - and you're correct too. Just a bit of crosstalk.

The irony is if Telstra built an open access wholesale network in the same area as NBNCo and waived fees for both its retail and wholesale customers then it would be accused of being monopolist.

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#337638 3-Jun-2010 06:31

Screeb:
sbiddle: Wholesale pricing and install costs are two totally different things.

Expect an average install to be in the $1000 - $2000 cost depending on exactly what's required. Who's going to pay that? It's a question that remains unanswered.

It's ironic that Vector won't actually answer any of the "tough" questions like this. They're happy to talk up their capability to offer a service but not talk about the finer details.

How many times do I have to spell this out to you? How can you possibly hope to predict prices 8-10 years into the future? The worst part is you aren't even doing that - you're just making up a figure. Xnet's FTTH costs $199 to install. Exactly how or why would the nationwide fibre cost 10 times that? 8 years from now, no less - at which point Xnet's is sure to be even cheaper. I can't find Exetel's fibre installation cost - but it should be telling that it's currently free until July (which is why I can't find the usual price I guess).

And you are fully aware of the ROI on the Aussie NBN network? Lots of NBN satuff including installation is being heavily subsidised, hence the low costs.

Screeb

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#337822 3-Jun-2010 14:10

ockel:
Exetels installation price was either A$195 or A$145. One of the joys for Tasmania is that NBNCo is waiving charges for wholesalers at present (to my knowledge) as part of the rollout for the Govt.

However the major difference between Xnet (or Exetel or Primus or iiNet) etc etc is that they are offering connections in what is already a greenfields fibre area with existing home wiring (and likely an ONT) already in the premise because that was the requirements as a fibre-only subdivision. And thats what we should expect pricing to be in 8-10 years when its just a truck roll for a connection - much like we pay for a MAC for a copper line these days. This compares to Vector (or whoever) that has to do a fibre roll/drop plus CPE to an existing copper-served home. In that case it will cost $1000-$2000 even in 8-10 years IMHO. The direct analogy is to ask yourself what the cost of adding a new (or extra) copper line (or gas or undergrounding your overhead telephone connection or any other utility) at the moment. Vector or Telecom or a third party will still quote you $1000-$2000 today for an extra utility thats not fibre.

So in essence sbiddle is correct - and you're correct too. Just a bit of crosstalk.

The irony is if Telstra built an open access wholesale network in the same area as NBNCo and waived fees for both its retail and wholesale customers then it would be accused of being monopolist.

Yep, I know it's definitely reasonable that it costs $1000-$2000 if you wanted FTTH right now outside of a greenfields. I don't think that was what sbiddle was talking about though - especially as he has quoted similar prices in other threads specifically talking about what it will cost for people wanting FTTH on the nationwide network when it goes live.

sbiddle:
And you are fully aware of the ROI on the Aussie NBN network? Lots of NBN satuff including installation is being heavily subsidised, hence the low costs.

Low costs? As ockel has helpfully pointed out, the reason it's free is due to the subsidisation, and the usual price is in line with Xnet's current price. Is Xnet's fibre network also part of the Australian NBN? No. Is it being subsidised? I'm pretty sure it's not (and If it was, then future nationwide connections could be subsidised too). So I'm not sure what point you're trying to make, or where your justification is that it would cost $1-2k to get FTTH installed in your house when the nationwide network is ready.

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#337854 3-Jun-2010 14:57

Warning: Fibre noob here :P

If it does end up being over $1000, where would the bulk of this cost come from? The fibre itself, the labour, or the actual equipment ("fibre modem" if you will)?

A quick search shows the cable being relatively cheap, which makes me think that the labour will be the big one. At present, my copper cable is overhead from pole to house. If that was switched with a fibre cable, then there'd be no trenching required, which presumably would significantly lessen the cost. Or am I on the wrong track here?

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#338002 3-Jun-2010 19:28

Screeb: So I'm not sure what point you're trying to make, or where your justification is that it would cost $1-2k to get FTTH installed in your house when the nationwide network is ready.

A subsidy simply hides the true cost. It doesn't change the fact that a true cost significantly greater than the cost a customer pays is incurred during the installation. Somebody has to pay that cost, it doesn't magically disappear. I have NEVER said a customer will have to pay that full cost of installation, I'm merely pointing out the very realistic cost of providing hardware and installation. I'm not sure what part of that you find so difficult to grasp.

ockel

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#338137 4-Jun-2010 06:09

Behodar: Warning: Fibre noob here :P

If it does end up being over $1000, where would the bulk of this cost come from? The fibre itself, the labour, or the actual equipment ("fibre modem" if you will)?

A quick search shows the cable being relatively cheap, which makes me think that the labour will be the big one. At present, my copper cable is overhead from pole to house. If that was switched with a fibre cable, then there'd be no trenching required, which presumably would significantly lessen the cost. Or am I on the wrong track here?

About 70% of the costs are civil costs (trenching etc). Using overhead vs underground reduces costs significantly but you've still got to get the fibre to a pit outside or near your house. Moving from ~$100-150/metre to $50-80/metre.

Then you need a OLT (at the exchange or cabinet) and an ONT in your home. The oft-neglected discussion is the cost of wiring your home. Getting it from the ONT to your PC, TV and other devices using cat5 or cat6 cabling isnt cheap. You could use a wireless connection from the ONT to your devices but if you want 100Mbps+ then theres not much point in creating a bottleneck at your home.

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Screeb

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#338320 4-Jun-2010 14:44

sbiddle:
Screeb: So I'm not sure what point you're trying to make, or where your justification is that it would cost $1-2k to get FTTH installed in your house when the nationwide network is ready.

A subsidy simply hides the true cost. It doesn't change the fact that a true cost significantly greater than the cost a customer pays is incurred during the installation. Somebody has to pay that cost, it doesn't magically disappear. I have NEVER said a customer will have to pay that full cost of installation, I'm merely pointing out the very realistic cost of providing hardware and installation. I'm not sure what part of that you find so difficult to grasp.

I'm not failing to grasp anything. You're backpedalling. The poster who started this thread asked what the FTTH prices (what the customer would pay) are likely to be, and you said "Expect an average install to be in the $1000 - $2000", thus heavily implying that's what you can expect to pay. The actual cost incurred is irrelevant to this thread entirely. You are at minimum guilty of being incredibly unclear in what you mean, resulting in a very misleading claim. I can only hope that you aren't being intentionally misleading.

Secondly, the actual cost is not unique to this particular FTTH initiative. Other FTTH initiatives have managed to survive. Getting worked up about actual installation costs in this case is entirely pointless and once again, irrelevant (and misleading) to the question.

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