Monday, March 22, 2010

Some (very) rough cost estimates


The reports from JANET(UK)'s recent LLU project offer an interesting insight into the costs that can be achived through local expertise and a willingness to engage with the detail of telecoms provision. From the report on Access Locate:
"By having both LLU and Access Locate space in an exchange you are able to take advantage of all the various types of Openreach tails, from a simple low cost MPF right up to 10GbE circuits over fibre. In every case the pricing for these is going to be the floor regulated price which is agreed with OFCOM and openly published on the web. This gives clarity of pricing that buying through third parties with all their associated mark ups does not."
The report models the following annual costs over a five year period for connecting 33 (28 primary, 5 secondary) schools in Carlisle. All figures are based on published Openreach pricing as of December 2009. Prices change frequently, so the following should be regarded with some caution. Modelling is based on connecting secondary schools at at 100Mbps and primaries at 10Mbps, through a combination of technologies available via unbundling an exchange.

This gives the following five-year annual cost per site across the 33 sites:
  • Standard WES: £4505/site/pa
  • LLU + WES: £3066/site/pa
  • LLU + Access Locate with WES-LA: £2128/site/pa
For this last option, note that 13 out of the 28 primary schools would be connected at 100Mbps and upgrading the remainder similarly would be a relatively low cost option.

The DCSF's Education and Training Statistics for the United Kingdom: 2009 tells us that there were 24,737 schools in England in 2008/2009. So to do the maths (if everything looked like Carlisle):
  • Standard WES: £4505/site/pa x 24,737 sites: £111m/pa
  • LLU + WES: £3066/site/pa x 24,737 sites: £76m/pa
  • LLU + Access Locate with WES-LA: £2128/site/pa x 24,737 sites: £53m/pa
And for a more rural area, Brampton, which is just to the east of Carlisle, to connect 6 schools (5 primaries, 1 secondary) gives the following costs, again over five years:
  • Standard WES: £10,236/site/pa
  • WES + POP in secondary school: £6388/site/pa
  • LLU + Access Locate + MPFs + WES-LA: £5258/site/pa
Similarly, for the last option above, 3 primaries would be connected at 100Mbps rather than 10Mbps.

So, doing the same maths again (if everything looked like Brampton) gives us:
  • Standard WES: £10,236/site/pa x 24,737 sites: £253m/pa
  • WES + POP in secondary school: £6388/site/pa x 24,737 sites: £158m/pa
  • LLU + Access Locate + MPFs + WES-LA: £5258/site/pa x 24,737 sites: £130m/pa
...all in the best tradition of beermats and fag packets of course, but interesting food for thought all the same. Especially in that these costs, while impressive in themselves, also suggest it's more than twice as expensive to connect rural areas, whichever of the three provisioning approaches is employed. As I said in a previous post, some very interesting parallels here with the US National Broadband Plan (see this previous post), on the importance of being able to access to the most cost effective provision available to you. Which, of course, may not be what the telcos would prefer to sell you?

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