Sunday, 31 March 2013

NBN: Cost per Premises of Fibre

What is the cost to NBN Co of building the PoI's and Transit Network (by 2014): A: ~$1950M
What is the average cost to NBN Co of deploying Fibre to a premise? A: ~$2,185
What does Telstra get for each disconnected copper line? A: ~$845

Average per-Premise Install cost: $1340 [$2185 - $845]

Per-Premise Install cost will include at least:
  • Planning, supervision
  • Transit, backhaul, shared hierarchy facilities/infrastructure and PoI's.
  • pits, pipes, ducts: new and existing.
    • Including new pipes under-street and between pits to accommodate the new network topology as well as remediating unusable pits, pipes and conduits.
  • lead-in pipe, existing or replacement + drop-cable
  • Fibre-loops in Fibre Distribution Area (200-300 premises).
  • On-street fibre-pit, shared between adjacent premises.
  • Premise External Fibre Connection point/box (termination of lead-in)
  • In-premises cabling, conduits, fibre termination point and powered ONT (Optical Network Termination)
From the 206,000km total Fibre distance, there is one premise per 17m of cable.
From the road distance, 12.1m between premises.
The average inter-property distance will be nearly twice this as "roads have two sides".

The difference, 58,000km, could be the length of Transit network, an average of 480km per PoI.
This would equate to 24 cables of 20km each in Fibre Distribution Areas. The Pirelli/Prysmian 6-core underground cables contain 864 fibres (144 per tube, as 12*12-fibre ribbons) and are built for this trunking.

I have no estimate for the length or cost of "drop" or "lead-in" cables, for which Corning has the contract. They also supply a 4-tube non-filled cable.

75% of Premises will be underground (and use full length of Telstra ducts & pits), for which a higher rental (OpEx) will be charged and will cost more to install (CapEx).

There will be some remedial work, in replacing full or unusable ducts. This could cost $55/m for trenching, add conduit, labour, hardware and planning/supervision.

Around 2002, TransACT passed 55,000 premises for $40M in the A.C.T. This was all aerial deployment (Electricity poles), with 32-port VDSL nodes @ 300m, or roughly $800/premise (passed).
This compromised both a fibre backhaul network and new "category 5" cable for the last 300m.

The topology allowed radial coverage vs the "along a single cable" of the PSTN/Copper C.A.N., considerably increasing the number of premises served per node.
The Telstra 2005/6 FTTN documents cite 160 premises/node for 1500m which scales to 40 premises/node per 800m and, at best, 20 premises/node @ 400m.

This provides a ballpark confirmation of the estimate:
  • $1500/premise underground
  • $900/premise aerial.

In 2002, there were ~72,000 "Distribution Areas" in the Telstra Copper C.A.N.
In 2005 FTTN docs, Telstra cites 8.6M "service addresses", suggesting DA's average 120 "service addresses", potentially 160 services (10M PSTN services have been cited).
I have no information on

NBN Co Corporate Plan, 6-Aug-2012. p37, 75
Telstra 2011 Definitive Agreement, p2
(2002) Connecting Regional Australia, data on DA's and Fault Rates.
The 2012-15 Corporate Plan projects that the FTTP network will be constructed by passing more than 206,000 kms of physical network distance (based on network configuration and covered road distances of 148,000 kms). 25% of the premises are expected to be passed aerially in the Local network, representing 35,000 kms of aerial deployment. [from p75 of NBN Co Corporate Plan]
The "Discounted Premises per Year" below is the Premises-per-Year divided by (1 + 0.10)where 0.10 is the 10% Discount Rate, and t is the year number.
This is summed into "Cumulative Discounted Premises per Year", right-most column.

This Discounted figure allows the known notional dollar cost to be converted to a fixed per-premise fee from the post-tax NPV figure provided by Telstra.

NBN Co Fibre Deployment Only




2014$1961.76MCommon Cost (raw)
...2021$2,173Inc cost/premise (raw)

2014$1950MCommon Cost (rounded)
...2021$2,185Inc cost/premise (rounded)

Telstra Discount rate = 10%,
Post-tax NPV of disconnection over 10 years = $4B
$4,000,000 / 6763.31 = $591.426/line Post-tax
$591.426 / 0.7 = $845 Pre-Tax [Tax Rate is 30%, from Reuters Financials via Google Finance.]

Telstra 2005/6 FTTN Links:

Optical Fibre Links:

Media Release on Fibre Contracts, 17-Jan-2011.

10 August 2012, "How Fibre Optic Cable is made"

 26 February 2013, Progress on the Pirelli/Prysmian contract.

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