Fibre to the Node Overview

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(No Transcript)
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Fibre to the NodeOverview
December 2008 Mark Ratcliffe
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Overview

• The FTTN Programme
• Progress so far
• Our customers
• Impact of the STD
• Our team today

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What FTTN means for NZers

• World class connectivity
• Step change in services and capability
• Overcome the tyranny of distance
• Platform for increased productivity growth

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Network Performance after FTTN

• Early post-cabinet indicators
• 12Mbps attainable speed (average depending on
  performance factors)
• Broadband in the area increases by average 34
  (noting that initial cabinets are in lowest
  penetration areas)
• In Pt Chevalier, broadband connections in some
  cabinets have increased by up to 200
• Some work still required on the Data source

Actual
Attainable
Data source 5530 network analyser
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The FTTN Programme scale

• To roll out the FTTN programme Chorus will
• Invest 500m
• Once we ramp up, install one cabinet every 40min
  until the end of 2011
• Lay 2500km of new fibre
• Cut and reconnect about 4 million copper cable
  pairs
• Employ or contract 500 full time workers
• Before installing each cabinet we
• Work with the local council to identify each site
• Consult the affected local resident
• Letter drop the neighbourhood
• Present to community interest groups

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The FTTN Programme complexity
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FTTN Dashboard
Delivery of Determinations Undertakings
Delivery of Cabinet Rollout
Customers Migrated
Delivery of RMA Requirements
History - Financial Year 08/09

• Service Company invoicing did occur as expected
  project under spent

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Rollout
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North Shore - July 2008
KEY Blue where broadband speeds are improving
for customers during each phase of the project
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North Shore - October 2011
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Our customer focus

• Its our job to meet customer needs
• The commercial aspects of the sub-loop project
  have been run parallel with the regulatory
  process, and a commercial trial will commence in
  December.
• Consultation
• Cabinet design
• TCF and the development of the STP
• Chorus forecasting of cabinetisation

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Our customer focus cont.

• We recognise our customers face a challenge
• Sub-loop services cost more than UCLL
• Our customers have to sell the extra value to
  end-users
• Retail markets and products must be developed
• However loading all the risk onto Chorus is not
  the answer (as discussed below, the business case
  must stack up)
• Across the network our customers have options
  UCLL, Sub loop, SLES, BUBA and EUBA

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Impact of draft STD operational

• Risk of delay
• Departures from what was agreed at the TCF and
  built into our planning risk derailing our
  project management.
• Risk of gold plating
• The TCF made a number of decisions aimed at
  designing a Sub-loop service that is practically
  useful.
• The draft STD introduces unwanted complexity and
  cost for Chorus and ultimately our customers.

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Impact of draft STD economics

• The draft STD under-prices Sub-loop services.
• It also raises our costs. For example
• Complicated market share and allocation process
• Special purpose database
• Regulating backhaul as dark fibre converts
  backhaul transmission into a lower value, lower
  revenue access service.

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Impact of STD economics cont.

• Chorus is committed to rolling out fibre past the
  Milestones, if possible. No stone unturned.
• The draft STD will change our business case.
• Chorus must act as a stand alone business.
• As things stand in the draft STD, we will need
  to
• Go back to the Telecom board and report that the
  FTTN Milestones are uncommercial
• Revisit our ability to go further than the FTTN
  Milestones
• We need the economics to stack up.

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Finalising the STD

• Chorus submits the Commission should refer back
  to some key principles
• Investment incentives should be preserved
• Industry agreements should be supported
• The realistic needs of our customers should be
  met
• Consistency with previous STD decisions is
  important
• Chorus must act in its commercial interests,
  taking a long term view
• And bear in mind the very real risks of delay and
  gold plating

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This conference

• Chorus committed to assisting the Commission
• Happy to take questions
• Chris Dyhrberg to introduce our team