The National Broadband Network roll-out would cost considerably less than Government’s back-of-envelop forecast of $43 billion at no more than $27 billion, Canada-based Axia’s global chief executive Art Price has told a Senate committee.

Axia, which has won government contracts to build and operate open access networks in Alberta was also one of the joint venture partners who won the right to be the NetCo - the company which builds the network - in Singapore.

Speaking to ITWire after appearing at a Senate select committee hearing investigating the NBN Price said Axia was continued to work to secure a major role for itself in partnership with government in the construction, ownership and management of an open access wholesale network.

Price says the project’s major capital cost would be in delivery the fibre to the home portion of the network, at about $20 billion, a figure which I have been promoting for some time based on previous evidence of FTTH brownfield deployments by Verizon in the USA, and Bright Telecom in Western Australia.

Price claims, the “Community Interconnect Grid” – or the national backhaul and trunk routes connecting communities – would cost between $5 billion and $7 billion, according to the Axia costing model. Again very similar pricing to what I have presented in the past.

Price further added "the network would require financial support until it had achieved penetration of 60 per cent of end-user customers, with average revenue per user for simple ISP access and voice services of between $50 and $60, and little more than $100 with bundled value-adds like IP video and IPTV."

It would be interesting to see a response by Henry Ergas on some financially modelling with costs such as this. As I had previously indicated one of the failings of the Anti NBN bregade was all their costings were based on a build cost of $43b. At $20b or half the price (for the 90% portion) the cost models are completely different. This price of between $20-$25b is now been supported by a number of industry experts.

1 comments:

At 27 August, 2009 06:06 roxy said...

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