VOC on it's way out, page-9

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chutoro

389 Posts.

11/11/16

13:43

Post #: 20549483
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Originally posted by bug1 ↑

Re the 'last mile', it would be really expensive for VOC and TPG to try and compete with Telstra or Optus pre NBN because it would just cost too much money to lay multiple cables to residential customers door, it would take a long time to repay itself, and carry a lot of financial risk if customers switch providers after a short time. And its just an inefficient use of resources to duplicate infrastructure like that.

The strength of the NBN is that it does do that 'last mile' connection to everyone door, and leaves the retailers to compete amongst themselves for access. The NBN can afford to take a long term view because its a wholesaler, it doesnt have to be concerned with competition because of some monopoly considerations given by the government. That is probably the difference between AUS and other markets like the US.

The NBN takes customer data past 'interconnection points' where the retails can pull the data off the NBN's network and use there own network (backhaul), and as long as the cost of doing that is cheaper than the price the NBN would charge they have an advantage over pure NBN players.

Having competing backhaul also creates points of differentiation between providers. If the TPG or Voc's backhaul is getting overloaded they might be able to use the NBN for the excess data. If the NBN backhaul is getting overloaded there is nothing a pure play NBN provider can do.

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Thank you for the explanation.

VOC doesn't have much backhaul - for memory it was 1600 km. Optus has mobile infrastructure not much fixed line? Telstra isn't building a thing but selling copper to NBN Co.

Isn't it only TPG that aims to connect 500,000 buildings and has over 45,000kms?

VOC Price at posting: $5.45 Sentiment: None Disclosure: Not Held
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