How much does a Fibre network actually cost

[CT_Biker]

I would like to inquire, how much does a Fibre network actually cost to install?

From backhaul up until the last mile(Before customer property), including all necessary equipment needed

 

[websquadza]

How long is a piece of string? Network design, deployment scope and scale, vendor choice, trenched or aerial, backhaul distance and more all have a role to play in "pricing" fibre.

Just Layer 1 - the physical fibre, ducts, trenching, labour, wayleave applications and more that it takes to get it ready to light up: +-R 650k - R1m / km.

Carrier switching equipment (for backhaul and aggregation), think mainstream German car pricing (the expensive ones). Last mile equipment, depends on the technology and vendor you choose.

 

[CT_Biker]

Could you give me a cost estimate for a GPON network, as this is the propagation method chosen by our vendor for our side of the road.

I am just asking out of interest, and doing some research for myself.

 

[portcullis]

Just Layer 1 - the physical fibre, ducts, trenching, labour, wayleave applications and more that it takes to get it ready to light up: +-R 650k - R1m / km.

Add to that about R4,000 per PON end unit and about R6,500 for every active end unit.

 

[ArtyLoop]

That's why Octofail likely cuts corners..

 

[CT_Biker]

Add to that about R4,000 per PON end unit and about R6,500 for every active end unit.

So approximately 1km of Fibre will cost approximately R2 000 000. That is including the switching and controller hardware?

 

[CT_Biker]

That's why Octofail likely cuts corners..

Here I am trying to figure out why Vuma alternates between GPON and AEN depending on which side of the road you live - other than the obvious answer being that usually light poles are only on one side of the road

 

[portcullis]

So approximately 1km of Fibre will cost approximately R2 000 000. That is including the switching and controller hardware?

That's about right.

We recently singed off on an 800m road with 27 houses. Cost was +/- R1.6M. But... that was dug down to 500mm and we used proper 110mm duct (pipe) under the ground with proper manholes at every third house. From the manholes we ran microduct to boundary boxes in front of each house, then a very strong microduct (weed wacker proof) up to the wall box in front of each house.

This is not the cheap way to do it, but it's how we do all our FTTx builds.

The cheap way is to direct bury a 7 way duct about 300mm under the ground and use way less of the big manholes.

 

[CT_Biker]

After ISP buy access to your network and the lines are leased and made live at an price of R600 per, that's R16200 per month.

Where do you as an FNO make money? Surely you lease lines off to ISP's, which they buy in bulk and I am sure you can sell those same 27 lines to every ISP and simply charge them a network access fee. I haven't even thought of maintenance as well, but surely being an FNO, you guys need to make some kind of profit on your infrastructure - even if the first year or two of service is loss-leading

I am sure you can see that I am trying to figure out how much my IC really costs.

 

[websquadza]

Here I am trying to figure out why Vuma alternates between GPON and AEN depending on which side of the road you live - other than the obvious answer being that usually light poles are only on one side of the road

Light poles are cheaper to deploy on and GPON is cheaper than active Ethernet. The rationale behind their choice to operate the two networks (besides the obvious cost savings of aerial fibre), is known only to them.

After ISP buy access to your network and the lines are leased and made live at an price of R600 per, that's R16200 per month.

Where do you as an FNO make money? Surely you lease lines off to ISP's, which they buy in bulk and I am sure you can sell those same 27 lines to every ISP and simply charge them a network access fee. I haven't even thought of maintenance as well, but surely being an FNO, you guys need to make some kind of profit on your infrastructure - even if the first year or two of service is loss-leading

I am sure you can see that I am trying to figure out how much my IC really costs.

The guys who are really making a decent investment in fibre infrastructure aren't in it for the quick buck (at least I hope not). If your network is open access, you can only bill the ISPs for the circuits that go live. So revenue is relatively flat. There are smaller operators who generate a decent returns (we're talking < 3 years - assuming they built something decent). But for the national players, the returns are faar longer than that. Their operational costs alone are staggering (delivering the maintenance levels they do, staffing and overheads are surprising).

 

[portcullis]

After ISP buy access to your network and the lines are leased and made live at an price of R600 per, that's R16200 per month.

You don't make a cent for the first five years.

If every port was earning R600 you could make something, but what gets you is the people who buy the 5Mb ports for around R350.

You need a very long term outlook if you're going to do fibre properly.

 

[cavedog]

Light poles are cheaper to deploy on and GPON is cheaper than active Ethernet. The rationale behind their choice to operate the two networks (besides the obvious cost savings of aerial fibre), is known only to them.



The guys who are really making a decent investment in fibre infrastructure aren't in it for the quick buck (at least I hope not). If your network is open access, you can only bill the ISPs for the circuits that go live. So revenue is relatively flat. There are smaller operators who generate a decent returns (we're talking < 3 years - assuming they built something decent). But for the national players, the returns are faar longer than that. Their operational costs alone are staggering (delivering the maintenance levels they do, staffing and overheads are surprising).

Once the build is "paid off" then some money will come in but then again to pay it off takes more and more time as staff costs and God forbid fibre breaks start to reduce the monthly income to "pay off" the build. Seems like it's not really worth it unless you can get a fair amount of market share early to deter other players from moving in so you have kind off a monopoly. Having more than one cable provider pass a house probably means disaster because then you need to compete on price to get that sale and the margins are already so small.

 

[pinball wizard]

"paid off"
"pay off"

Why the inverted commas?

 

[cavedog]

Why the inverted commas?

I used the inverted commas because it's an investment of sorts not really a loan or car repayment. Not sure if you can refer to it as being paid off or rather return on investment. I'm not really sure what the correct way is to refer to it but wanted an easy way to explain how a build would be paid off I guess if that makes sense.

 

[pinball wizard]

I used the inverted commas because it's an investment of sorts not really a loan or car repayment. Not sure if you can refer to it as being paid off or rather return on investment.

Cool.

Being at the pointy end of an FNO, I find this thread interesting.

 

[cavedog]

Cool.

Being at the pointy end of an FNO, I find this thread interesting.

Very interesting indeed.

Nice to see reps joining in including the undercover SADV reps

 

[pinball wizard]

Very interesting indeed.

Nice to see reps joining in including the undercover SADV reps

Not so much undercover as incognito

 

[portcullis]

Once the build is "paid off" then some money will come in but then again to pay it off takes more and more time as staff costs and God forbid fibre breaks start to reduce the monthly income to "pay off" the build. Seems like it's not really worth it unless you can get a fair amount of market share early to deter other players from moving in so you have kind off a monopoly. Having more than one cable provider pass a house probably means disaster because then you need to compete on price to get that sale and the margins are already so small.

There's an old expression; "How do you get a girlfriend? Have one."

It's exactly the same with fibre. As soon as one company comes past your door, more will follow. That is why so many ISPs are so keen to sign people onto contracts under the guise of offering a free router.

We see this time and again. As soon as we put in for wayleaves, a certain national operator immediately uses their existing poles into houses to run overhead FTTH, while at least one other company will dig behind us.

We put this to the test at my home. In November last year we applied for a wayleaf for a dog leg that would run past my house. CoCT was still deciding on the deposit for the job - before we'd even thought of digging - and I had 200Mb FTTH from one network into my home. It wasn't even "light pink" on their map coverage map at that point. Last month my 500Mb FTTH went live on a second network. We're the ISP in both cases. But we obviously don't own the fibre.

Let's look at a completely different town - Nelspruit. One of our colleagues is digging there. Quietly. Doing his thing. Suddenly the areas where he's been digging are also being saturated with fibre from a nationwide network.

For those of you who don't know, a wayleaf works as follows:
The local municipality / council will have a list of organisations that have dug. You need to contact each of them and ask whether they want to be part of a co build, or whether they have infrastructure in place where you want to dig. So you basically have to tell your competition what your plans are.
Once you have your letters (for example in CT) from Openserve, DFA, MTN, City Fibre, Cybersmart, Frogfoot, Octotel and Liquid Telecom, you head off to Water and Sanitation and ask them for a permit. Then it's the town engineer and the electrical guys. Only once you have all those permits can you put a pick into the ground. If you've not reinstated pavements, the town engineer can refuse you. If you've drilled into a high voltage cable because you were too cheap to use GPR, the electrical guys can refuse you.

I don't want to sound like someone who's whining, but it's not exactly fair on the rest of us that one company can simply see where the other companies plan on digging, apply for an emergency permit to do maintenance on their existing pipes, put in a manhole, run fibre up the pole and run overhead to clients homes, while the rest of us are still waiting for the wayleaves to be approved.

 

[cavedog]

There's an old expression; "How do you get a girlfriend? Have one."

It's exactly the same with fibre. As soon as one company comes past your door, more will follow. That is why so many ISPs are so keen to sign people onto contracts under the guise of offering a free router.

We see this time and again. As soon as we put in for wayleaves, a certain national operator immediately uses their existing poles into houses to run overhead FTTH, while at least one other company will dig behind us.

We put this to the test at my home. In November last year we applied for a wayleaf for a dog leg that would run past my house. CoCT was still deciding on the deposit for the job - before we'd even thought of digging - and I had 200Mb FTTH from one network into my home. It wasn't even "light pink" on their map coverage map at that point. Last month my 500Mb FTTH went live on a second network. We're the ISP in both cases. But we obviously don't own the fibre.

Let's look at a completely different town - Nelspruit. One of our colleagues is digging there. Quietly. Doing his thing. Suddenly the areas where he's been digging are also being saturated with fibre from a nationwide network.

For those of you who don't know, a wayleaf works as follows:
The local municipality / council will have a list of organisations that have dug. You need to contact each of them and ask whether they want to be part of a co build, or whether they have infrastructure in place where you want to dig. So you basically have to tell your competition what your plans are.
Once you have your letters (for example in CT) from Openserve, DFA, MTN, City Fibre, Cybersmart, Frogfoot, Octotel and Liquid Telecom, you head off to Water and Sanitation and ask them for a permit. Then it's the town engineer and the electrical guys. Only once you have all those permits can you put a pick into the ground. If you've not reinstated pavements, the town engineer can refuse you. If you've drilled into a high voltage cable because you were too cheap to use GPR, the electrical guys can refuse you.

I don't want to sound like someone who's whining, but it's not exactly fair on the rest of us that one company can simply see where the other companies plan on digging, apply for an emergency permit to do maintenance on their existing pipes, put in a manhole, run fibre up the pole and run overhead to clients homes, while the rest of us are still waiting for the wayleaves to be approved.

Ohh Openserve is playing Dirty and not just IPC prices diry....

 

[portcullis]

Let's not even talk about IPC and OFB prices. That's just depressing.