<div dir="ltr">Looking at it one more time with fresh eyes, I had one error on the 25/10 original price point, quoted as $20/mth, actually $30/mth. <div><br></div><div><i>25/10: $20 * 11853 = $355,590/mth</i><br><div><br></div><div>The math on the total AVC for the speed was accurate though, $355k was correct.</div><div><br></div><div>It comes out to increases of:<div><br></div><div><div>12/1: $39.12/mth revised, increase of 63% from $24/mth</div><div>25/5: $42.12/mth revised, increase of 56% from $27/mth</div><div>25/10: $46.87/mth revised, increase of 56% from $30/mth</div><div>50/20: $49.10/mth revised, increase of 44% from $34/mth</div><div>100/40: $53.12/mth revised, increase of 39.7% from $38/mth</div></div></div></div><div class="gmail_extra"><br></div><div class="gmail_extra">So not quite 100%, but 50% in some port speeds. The interesting question would be how do revised AVC prices like this compare to current retail prices, and would it squeeze RSP margins too much.</div><div class="gmail_extra"><br></div><div class="gmail_extra">Looking at current retail offerings for a couple of the larger RSPs (kept it simple here, there are some other bundle options also):</div><div class="gmail_extra"><br></div><div class="gmail_extra"><b><i>Telstra:</i></b> </div><div class="gmail_extra"><b><i><br></i></b></div><div class="gmail_extra">100GB on 25/5 = $75/mth inc GST. Leaves about $26.06 ex GST to cover all other business costs.</div><div class="gmail_extra">1000GB on 100/40 = $95/mth inc GST. Leaves about $33.24 ex GST to cover all other business costs.</div><div class="gmail_extra"><b><i><br></i></b></div><div class="gmail_extra"><b><i>Optus:</i></b> </div><div class="gmail_extra"><b><i><br></i></b></div><div class="gmail_extra">Unlimited on 12/1 = $80/mth inc GST. Leaves about $33.60 ex GST to cover all other business costs.</div><div class="gmail_extra">Unlimited on 25/5 = $90/mth inc GST. Leaves about $39.69 ex GST to cover all other business costs.</div><div class="gmail_extra">Unlimited on 50/20 = $100/mth inc GST. Leaves about $41.80 ex GST to cover all other business costs.</div><div class="gmail_extra">Unlimited on 100/40 = $110/mth inc GST. Leaves about $46.88 ex GST to cover all other business costs.</div><div class="gmail_extra"><b><i><br></i></b></div><div class="gmail_extra"><b><i>TPG:</i></b></div><div class="gmail_extra"><b><i><br></i></b></div><div class="gmail_extra">10GB on 12/1 = $29.99/mth inc GST. Well above the $39.12 ex GST figure, without covering other business costs.</div><div class="gmail_extra">100GB on 12/1 = $49.99/mth inc GST. Leaves about $6.32 ex GST to cover all other business costs.</div><div class="gmail_extra">Unlimited on 12/1 = $59.99/mth inc GST. Leaves about $15.41 ex GST to cover all other business costs.</div><div class="gmail_extra">Unlimited on 25/5 = $69.99/mth inc GST. Leaves about $21.50 ex GST to cover all other business costs.</div><div class="gmail_extra">500GB on 100/40 = $89.99/mth inc GST. Leaves about $28.68 ex GST to cover all other business costs.</div><div class="gmail_extra">Unlimited on 100/40 = $99.99/mth inc GST. Leaves about $37.78 ex GST to cover all other business costs.</div><div class="gmail_extra"><br></div><div class="gmail_extra"><b><i>Dodo (to catch M2/Vocus in the analysis):</i></b></div><div class="gmail_extra"><br></div><div class="gmail_extra">10GB on 12/1 = $29.90/mth inc GST. Well above the $39.12 ex GST figure, without covering other business costs.</div><div class="gmail_extra">10GB on 25/5 = $44.90/mth inc GST. Also slightly above the $42.12 ex GST figure, without covering other business costs.</div><div class="gmail_extra">10GB on 100/40 = $64.90/mth inc GST. Leaves about $5.88 ex GST to cover all other business costs.</div><div class="gmail_extra">50GB on 12/1 = $44.90/mth inc GST. Leaves about $1.69 ex GST to cover all other business costs.</div><div class="gmail_extra">50GB on 25/5 = $54.90/mth inc GST. Leaves about $7.78 ex GST to cover all other business costs.</div><div class="gmail_extra">50GB on 100/40 = $79.90/mth inc GST. Leaves about $19.51 ex GST to cover all other business costs.</div><div class="gmail_extra">Unlimited on 12/1 = $64.90/mth inc GST. Leaves about $25.78 ex GST to cover all other business costs.</div><div class="gmail_extra"><div class="gmail_extra">Unlimited on 25/5 = $74.90/mth inc GST. Leaves about $25.97 ex GST to cover all other business costs.</div><div><div class="gmail_extra">Unlimited on 100/40 = $99.90/mth inc GST. Leaves about $37.69 ex GST to cover all other business costs.</div></div></div><div class="gmail_extra"><br></div><div class="gmail_extra"><br></div><div class="gmail_extra">Based on the above, the lower priced (mostly lower quota) plans would have to either go away entirely or be increased in price to be viable on a higher AVC alone. I guess this is one reason CVC has it's place, as those low quota plans will use practically nil CVC without hitting quota, allowing the AVC to remain lower... obviously thats excluding discussion on what price CVC is charged at.</div><div class="gmail_extra"><br></div><div class="gmail_extra">Other than the political implication of increased average retail costs for the public, the upside would be no more data quotas industry wide I suspect, being CVC is mostly the largest cost impediment to transferring that data quota.</div><div class="gmail_extra"><br></div><div class="gmail_extra">Another thing to consider, is if NBN Co has forecasted that CVC revenue won't grow at quite linear to AVC revenue, due to contention ratios once you have some critical mass on a per RSP basis (once you have at least 5-10x backhaul capacity provisioned for a given set of subscribers, based on average subscriber port speed, you can assume all users won't be hitting maximum at all times, which is where contention ratios and managing peaks comes into play). This would also potentially allow for lower AVC figures than the assumptions in this thread, which all are based on linear increases.</div><div class="gmail_extra"><br></div><div class="gmail_extra">Regards, Nathan.</div><div class="gmail_extra"><br><div class="gmail_quote">On Tue, Nov 22, 2016 at 10:12 PM, <span dir="ltr"><<a href="mailto:ausftth@mail.com" target="_blank">ausftth@mail.com</a>></span> wrote:<br><blockquote class="gmail_quote" style="margin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204);padding-left:1ex"><span class="gmail-">In other words, you'd only have to raise AVC prices 50-100% to be rid of the pox that CVC is. Too bad that's politically infeasible.<br>
<br>
Jared<br>
<br>
<br>
<br>
</span>Sent: Tuesday, November 22, 2016 at 1:40 PM<br>
<span class="gmail-">From: "Nathan Sullivan" <<a href="mailto:nathan@nightsys.net">nathan@nightsys.net</a>><br>
To: "Mark Smith" <<a href="mailto:markzzzsmith@gmail.com">markzzzsmith@gmail.com</a>><br>
Cc: "<<a href="mailto:ausnog@lists.ausnog.net">ausnog@lists.ausnog.net</a>><wbr>" <<a href="mailto:ausnog@lists.ausnog.net">ausnog@lists.ausnog.net</a>><br>
Subject: Re: [AusNOG] NBN<br>
<br>
</span><span class="gmail-">Thanks Mark, OK this has prompted me to do the math, heh...<br>
<br>
Anyone who wishes, feel free to peer review these numbers, if you find any assumptions are "off"/could be done differently etc.<br>
<br>
</span>First off, Premises Activated stands at 1,378,273 as of 30th September 2016 (aligns with between the weekly figures[<a href="http://www.nbnco.com.au/content/dam/nbnco2/documents/nbn-rollout-metrics/nbn-rollout-metrics-22102016.pdf" rel="noreferrer" target="_blank">http://www.nbnco.com.<wbr>au/content/dam/nbnco2/<wbr>documents/nbn-rollout-metrics/<wbr>nbn-rollout-metrics-22102016.<wbr>pdf</a>] from 29-Sep-2016 and 06-Oct-2016). Premises Activated at the start of the quarter was 1,098,634 (30-Jun-2016). Need to factor in that this metric is not static throughout the quarter, so will need to amortise everything down to monthly to work with next.<br>
<span class="gmail-"> <br>
Revenue of $181 million total. FTTN + Wireless + Satellite + FTTP revenue adds up to $115 million (page 3 of the results presentation). CVC/NNI revenue of $54 million. Pity we don't have the split for this, but let's continue.<br>
<br>
Now I'm going to aggregate the fixed line + fixed wireless speed breakdown %s to ease the next calculations. Using figures on 29th September 2016 (4k~ subs lower than actual), wireless activations sat at 136,935, fixed line sat at 1,185,353. Page 5 of the results presentation gives us:<br>
<br>
fixed line 12/1: 31% = 367459 subs<br>
fixed line 25/5: 51% = 604530 subs<br>
fixed line 25/10: 1% = 11853 subs<br>
fixed line 50/20: 4% = 47414 subs<br>
fixed line 100/40: 13% = 154095 subs<br>
<br>
fixed wireless 12/1: 17% = 23278 subs<br>
fixed wireless 25/5: 80% = 109548 subs<br>
fixed wireless 50/20: 3% = 4108 subs<br>
<br>
And aggregated:<br>
<br>
</span>total: 1322288[tel:1322288] subs<br>
<br>
12/1: 367459 + 23278 = 390737 subs / 1322288[tel:1322288] = 29.55%<br>
25/5: 604530 + 109548[tel:+ 109548] = 714078 subs / 1322288[tel:1322288] = 54%<br>
25/10: 11853 subs / 1322288[tel:1322288] = 0.8%<br>
50/20: 47414 + 4108 = 51522 subs / 1322288[tel:1322288] = 3.89%<br>
100/40: 154095 subs / 1322288[tel:1322288] = 11.65%<br>
<span class="gmail-"> <br>
Based on current AVC pricing, working on September 2016 activation figures:<br>
<br>
12/1: $24 * 390737 = $9,377,688/mth<br>
25/5: $27 * 714078 = $19,280,106/mth<br>
25/10: $20 * 11853 = $355,590/mth<br>
50/20: $34 * 51522 = $1,751,748/mth<br>
100/40: $38 * 154095 = $5,855,610/mth<br>
Total: $36,620,742/mth<br>
<br>
Being the above metrics exclude satellite services, let's work in reverse to verify the monthly revenue figure is accurate enough. FTTN + Wireless + FTTP revenue for the quarter is $112 million. 3 x $36.620m = $109.86m. Close to accurate, the only concerning point is that the subs at June 30 was substantially less than September 30 (approx 20% less), which means the revenue figures could be closer to $28m for July 2016... so theres a good couple of million unexplained in revenue, which may skew things here (possibly the "other charges" stuff on the NBN Price List, support callouts, NTD modifications, no fault found callouts, etc etc. Let's assume that is explainable...)<br>
<br>
</span>So let's make a calculated assumption that NNI charges are about X % of CVC/NNI. Based on NNIs being connected by 14~ service providers[<a href="http://www.nbnco.com.au/sell-nbn-services/wholesale-providers.html" rel="noreferrer" target="_blank">http://www.nbnco.<wbr>com.au/sell-nbn-services/<wbr>wholesale-providers.html</a>] (a good portion of RSPs will be using one of these wholesalers and not paying for their own NNIs), 121 PoIs, without being in the "know" of how many Temp PoIs remain active vs currently active permanent PoIs this get's interesting... $400 per 10Gbit (assume most are using LR instead of ER, assume most are using 10G also for simplicity). Let's assume that 50% of all wholesalers are at all PoIs (to account for the fact metro PoIs will have almost all of the wholesalers, and the most remote PoIs will barely have Telstra + one other). ((14 * 121) * 0.5) * $400 = $338,800/mth. For the quarter, let's say $1mil. Note there are probably also a heap of NNI setup fees hiding in here also (new PoIs connected by various wholesalers), let's allow for $1mil extra there for the quarter also. Leaves $52mil for CVC. Note this breakdown was probably the most rough of all figures here due to lack of public data on the NNI side of things.<br>
<span class="gmail-"> <br>
Let's assume that Jul 2016 CVC is $15m, Aug 2016 CVC is $17m, Sep 2016 CVC is $20m, round figures... gets us to $52m.<br>
<br>
For September 2016, let's break down the subscriber figures above and take a proportionate % of the CVC and add to the AVC revenue, to get an aggregate we can divide by sub count to get the revised AVC per port (without CVC):<br>
<br>
<br>
12/1: 29.55% * $20m = ($5,910,000 CVC + $9,377,688 AVC) / 390737 subs = $39.12/mth revised.<br>
25/5: 54% * $20m = ($10,800,000 CVC + $19,280,106 AVC) / 714078 subs = $42.12/mth revised<br>
25/10: 0.8% * $20m = ($200,000 CVC + $355,590 AVC) / 11853 subs = $46.87/mth revised<br>
50/20: 3.89% * $20m = ($778,000 CVC + $1,751,748 AVC) / 51522 subs = $49.10/mth revised<br>
100/40: 11.65% * $20m = ($2,330,000 CVC + $5,855,610 AVC) / 154095 subs = $53.12/mth revised<br>
<br>
The biggest flaw to this is the proportional consumption of CVC by each port speed is probably far different to the % of services activated by speed. NBN Co probably have more internal metrics of actual traffic throughput averages by port speed activated, which would be a far better way to split up the current "CVC revenue pool" amongst the various AVC speeds.<br>
<br>
Noting all dollar values above are ex GST.<br>
<br>
PS. I should have thrown all this in Google Sheets, meh.<br>
<br>
Regards, Nathan.<br>
<br>
</span><span class="gmail-">On Tue, Nov 22, 2016 at 8:05 PM, Mark Smith <<a href="mailto:markzzzsmith@gmail.com">markzzzsmith@gmail.com</a>[<wbr>mailto:<a href="mailto:markzzzsmith@gmail.com">markzzzsmith@gmail.com</a>]<wbr>> wrote:On 22 November 2016 at 19:30, Nathan Sullivan <<a href="mailto:nathan@nightsys.net">nathan@nightsys.net</a>[mailto:<a href="mailto:nathan@nightsys.net">na<wbr>than@nightsys.net</a>]> wrote:<br>
> Just to touch on the CVC topic again... has anyone done the math on how much<br>
> the AVC would need to be increased to match the CVC charge revenue base?<br>
><br>
> As we know, NBN Co has some revenue targets to meet all of their financial<br>
> viability requirements, and there are a few cost bases that they recoup this<br>
> through. The 2 large ones being CVC and AVC charges, with other smaller ones<br>
> such as NNI (from the perspective of overall revenue, not itemised cost).<br>
><br>
> Based on the fact NBN Co has provided some figures in the past of percentage<br>
> of services on each tier (I don't have the most recent media articles that<br>
> were quoting those handy), that would allow calculating the AVC revenue<br>
> component to an extent, as services activated is a public metric on the<br>
> weekly reports.<br>
><br>
> Excluding the "other revenue" portion of things, this would then leave CVC<br>
> for the most part, plus a little for NNI's etc.<br>
><br>
<br>
Quite a lot of what you're after is in here. ARPU (per month not for<br>
the quarter), revenue broken down in to FTTP, Satellite, CVC etc.,<br>
speed tiers and percentages etc.<br>
<br>
</span><a href="http://www.nbnco.com.au/content/dam/nbnco2/documents/Q1%202017%20Results%20Presentation.pdf[http://www.nbnco.com.au/content/dam/nbnco2/documents/Q1%202017%20Results%20Presentation.pdf]" rel="noreferrer" target="_blank">http://www.nbnco.com.au/<wbr>content/dam/nbnco2/documents/<wbr>Q1%202017%20Results%<wbr>20Presentation.pdf[http://www.<wbr>nbnco.com.au/content/dam/<wbr>nbnco2/documents/Q1%202017%<wbr>20Results%20Presentation.pdf]</a><br>
<span class="gmail-"><br>
> Being that NBN Co has stated that as traffic volumes increase, they will<br>
> drop the per Mbit CVC price (within a defined range for now, publicly a<br>
> figure of "$10"/mbit has been thrown around), that would effectively argue<br>
> that they just need to meet that % of overall CVC revenue somehow. If this<br>
> were done in the form of increased AVC, and in return CVC goes away and all<br>
> services can consume up to their AVC rate limit, or the maximum capacity of<br>
> aggregated NNI's on a per provider basis, would this be a more suitable<br>
> solution?<br>
><br>
> I suspect the AVC prices would have to go up a semi-decent amount for this<br>
> to stack up, but if the only scaling cost to RSPs is then adding NNIs (which<br>
> are closer in price to IX ports), would this avoid a lot of concerns and<br>
> confusion? I'd be interested in seeing what those numbers actually looked<br>
> like, and if someone does publish them what other RSPs would think of<br>
> them... I haven't had enough spare time to do the math myself yet :)<br>
><br>
> Open to feedback/suggestions/<wbr>criticisms.<br>
><br>
> (Pricing document incase anyone wants to do the math:<br>
</span>> <a href="http://www.nbnco.com.au/content/dam/nbnco2/documents/sfaa-wba2-product-catalogue-price-list_20161028.pdf[http://www.nbnco.com.au/content/dam/nbnco2/documents/sfaa-wba2-product-catalogue-price-list_20161028.pdf]" rel="noreferrer" target="_blank">http://www.nbnco.com.au/<wbr>content/dam/nbnco2/documents/<wbr>sfaa-wba2-product-catalogue-<wbr>price-list_20161028.pdf[http:/<wbr>/www.nbnco.com.au/content/dam/<wbr>nbnco2/documents/sfaa-wba2-<wbr>product-catalogue-price-list_<wbr>20161028.pdf]</a><br>
> )<br>
><br>
> Regards, Nathan.<br>
><br>
> On Tue, Nov 22, 2016 at 5:20 PM, Mark Smith <<a href="mailto:markzzzsmith@gmail.com">markzzzsmith@gmail.com</a>[<wbr>mailto:<a href="mailto:markzzzsmith@gmail.com">markzzzsmith@gmail.com</a>]<wbr>> wrote:<br>
<span class="gmail-">>><br>
>> On 22 Nov. 2016 11:33 am, "Alex Samad" <<a href="mailto:alex@samad.com.au">alex@samad.com.au</a>[mailto:<a href="mailto:alex@samad.com.au">alex<wbr>@samad.com.au</a>]> wrote:<br>
>> ><br>
>> > Hi<br>
>> ><br>
>> > there was some talk about our network being able to handle amazon video<br>
>> > coming to oz.<br>
>> ><br>
>> > I'm thinking this might have more of an impact<br>
>> ><br>
>> ><br>
</span>>> > <a href="http://www.theverge.com/2016/11/21/13703152/netflix-4k-pc-windows-support[http://www.theverge.com/2016/11/21/13703152/netflix-4k-pc-windows-support]" rel="noreferrer" target="_blank">http://www.theverge.com/2016/<wbr>11/21/13703152/netflix-4k-pc-<wbr>windows-support[http://www.<wbr>theverge.com/2016/11/21/<wbr>13703152/netflix-4k-pc-<wbr>windows-support]</a><br>
<span class="gmail-">>> ><br>
>> > All those 4k tv's being sold..<br>
>> ><br>
>><br>
>> How many are actually being sold and how many are actually big enough for<br>
>> how close people sit to them for those people to benefit?<br>
>><br>
>> To sit a normal distance of at least 6 feet away, you need a 70"+ screen<br>
>> to actually benefit. Smaller 4K TVs look great in the shop because you're<br>
>> standing much closer to the screen.<br>
>><br>
</span>>> <a href="http://referencehometheater.com/2013/commentary/4k-calculator/[http://referencehometheater.com/2013/commentary/4k-calculator/]" rel="noreferrer" target="_blank">http://referencehometheater.<wbr>com/2013/commentary/4k-<wbr>calculator/[http://<wbr>referencehometheater.com/2013/<wbr>commentary/4k-calculator/]</a><br>
>><br>
>> > from<br>
>> > <a href="https://en.wikipedia.org/wiki/4K_resolution[https://en.wikipedia.org/wiki/4K_resolution]" rel="noreferrer" target="_blank">https://en.wikipedia.org/wiki/<wbr>4K_resolution[https://en.<wbr>wikipedia.org/wiki/4K_<wbr>resolution]</a><br>
<span class="gmail-">>> > Streaming video[edit]<br>
>> ><br>
>> > YouTube, since 2010,[67] and Vimeo allow a maximum upload resolution of<br>
>> > 4096 × 3072 pixels (12.6 megapixels, aspect ratio 4:3)<br>
>> ><br>
>> > High Efficiency Video Coding should allow the streaming of content with<br>
>> > a 4K resolution with a bandwidth of between 20 and 30 Mbps.[72]<br>
>> ><br>
>> ><br>
>> > Not sure what the current average DSL connection is . But all your going<br>
>> > to need is 2 kids (teenagers) and ....<br>
>> ><br>
>> ><br>
>> > if only it hadn't become politicised<br>
>> ><br>
>><br>
>> No even wrong.<br>
>><br>
>> CVC cost is the problem not FTTN. Changing to a literal 100% FTTP network<br>
>> would not solve that problem and would make it worse - NBNco have to pay for<br>
>> thosr loans somehow or other.<br>
>><br>
>> > A<br>
>> ><br>
>> ><br>
>> > ______________________________<wbr>_________________<br>
>> > AusNOG mailing list<br>
</span>>> > <a href="mailto:AusNOG@lists.ausnog.net">AusNOG@lists.ausnog.net</a>[<wbr>mailto:<a href="mailto:AusNOG@lists.ausnog.net">AusNOG@lists.ausnog.net</a><wbr>]<br>
>> > <a href="http://lists.ausnog.net/mailman/listinfo/ausnog[http://lists.ausnog.net/mailman/listinfo/ausnog]" rel="noreferrer" target="_blank">http://lists.ausnog.net/<wbr>mailman/listinfo/ausnog[http:/<wbr>/lists.ausnog.net/mailman/<wbr>listinfo/ausnog]</a><br>
>> ><br>
>><br>
>><br>
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>> <a href="mailto:AusNOG@lists.ausnog.net">AusNOG@lists.ausnog.net</a>[<wbr>mailto:<a href="mailto:AusNOG@lists.ausnog.net">AusNOG@lists.ausnog.net</a><wbr>]<br>
>> <a href="http://lists.ausnog.net/mailman/listinfo/ausnog[http://lists.ausnog.net/mailman/listinfo/ausnog]" rel="noreferrer" target="_blank">http://lists.ausnog.net/<wbr>mailman/listinfo/ausnog[http:/<wbr>/lists.ausnog.net/mailman/<wbr>listinfo/ausnog]</a><br>
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</div></div></blockquote></div><br></div></div>