[AusNOG] Telstra move to close exchange worries rivals

[Tim McCullagh]

----- Original Message ----- 
From: "Keiran Holloway" <keiran.holloway at anchor.com.au>


> http://www.theaustralian.com.au/australian-it/telecommunications/telstra-move-to-close-exchange-worries-rivals/story-fn4iyzsr-1225913520295
>
> Andrew,
>
> Surely completing this on a wide-scale is going to prove cost
> prohibitive?  If not, why aren't other ISPs rolling out their own
> networks on a wide-scale basis and just deploying their clients to this
> instead of on-selling Telstra wholesale services?
>

Putting in the fibre is the easy and cheap bit. (probably < 20% of the cost)

Pipe and duct access is the major cost of deployment otherwise others would 
be going gangbusters

Reports have it that duct access charges are around $6 per meter per year. 
This makes CAN deployments unviable using existing pipe and duct access.

It costs $40 to $60 per meter to directionally drill 63mm pipe under roads 
and footpaths plus pits and other costs. Then there is the cost of providing 
lead ins. One of the most interesting behaviours is that most people don't 
won't you digging up their yards.  In that case you are faced with 
directional drilling at $40 to $60 per meter which starts to make the 
business case a bit fragile.  Then you need to wire the building.  You also 
need a reasonable takeup of customers.  In the south brisbane case 40% may 
or may not be viable or parts there of may be.  The thing is that most ISPs 
don't want to get into the infrastructure space and as such not a lot of 
creativity has been applied.

That is not to say that it can't or shouldn't be done where a business case 
exists.   I bit of creativity can make it viable with tight cost control and 
efficient use of capital.  You would want to make sure you don't spend 
anything like what is being spent in Tassie otherwise you will never make a 
return.  Also worth bearing in mind that not everyone is looking for such 
services.   There is a move to mobile services at present.  Then there is 
the lesson from the optus HFC rollout days which should not be ignored.  You 
would want to be rather certain of your customer loyalty which is very hard 
to quantify.  These statements = risk.  Which I guess partially answers your 
question.

regards

Tim