Stuart Corner
Monday, 26 May 2008 12:04
Opinion and Analysis
Page 1 of 3
Telstra CEO Sol Trujillo's recent claim that the cost of rolling out an FTTN network to 98 percent of Australian homes would be closer to $15b than the $8 billion in the government's estimate has been dismissed as "a vain attempt to scare off the opposition," but some industry players think his estimate is, if anything, too low.
Stephen Davies, CEO of Titan ICT Consultants, an FTTH design, engineering and consulting firm claims
on his FTTH news site that "Telstra has been providing misinformation on the cost of building this network for the past 3-4 years, with estimates of $30-$50billion to deliver FTTH [as opposed to FTTN] giving Senator Conroy the shivers."
In support of his argument that Telstra is inflating the cost, Davies cites US telco Verizon which has spent $US19b since 2004 to pass 10 million homes in the United States. However according to Davies "this takes into account that when they first started the ONT (the equipment in the customer's home) was $US800 and labour costs where very high because of the large amount of fusion splicing by skilled contractors. An ONT is now $US300 and with the advent of connectorised solutions, fibre is much cheaper to install. Over the four years since they started, Verizon has been able to more than half their cost of deployment." So, he concludes, "if Verizon can do it for $19b Australia must surely be able to be considerably cheaper."
He also cites a
report published in the US in January by EDUCAUSE , a group that represents IT managers at over 2,200 colleges and universities across the US. It called for the construction of broadband networks able to deliver at least 100Mbps to every home and business in the United States by 2012. "They estimated the construction of this network to be approximately $US100 billion, with one-third of the funding provided by the federal government, one-third by the states, and the remaining one-third by the private sector," Davies said.
On a purely pro-rata basis he said that, for Australia with a population one twelfth that of the USA, the cost of a ubiquitous FTTH, rather than merely FTTN network, would be around $8 billion.
CONTINUED
