John Linton
We returned to London today amid a 28 degree 'heat wave' and after checking in to our hotel and having a pleasant Italian lunch, Annette went shopping and I attended a 'teleconference meeting' with a possible future supplier of wholesale services.
It was interesting to learn so much in so little time from people who are direct, informed and 'senior' enough to actually spell out what is and isn't available to a start up purchaser of services. I had given them a lot of the base information they required via an email exchange over the previous few weeks and this 'meeting' was to determine how to proceed if both parties wished to proceed. It was succinct (slightly less than an hour) and very much to the point meeting.
Two things are immediately apparent when comparing Australian cost structures to UK (EU) cost structures. The first is that per mbps interconnection from the BT telephone network used for wire line broadband is less than one quarter what Telstra charges Exetel in Australia. The second is that IP bandwidth costs less than one fifth of what we are paying in Australia today and that is based on the relatively trivial volumes we would be able to commit to in the UK compared to the 2 gbps+ volumes we use in Australia. The third, and overwhelming difference is the monthly port cost for a high speed/ADSL2 port (which are available almost everywhere in the UK - as opposed to ADSL1 speeds) at a cost of half what we pay in Australia.
So far so good after a little less than 15 minutes.
The volumes of connections required to become a wholesale customer are more than a little frightening for a start up company but, as was pointed out, if such volumes couldn't be achieved why would you bother investing in the required interconnect points which would cost around $A2,000,000 before you actually have a single customer connected?
It was a useful 'meeting' and has helped firm up what Exetel would need to do should we proceed down this path.
I have begun to update my analysis of what is being offered in the UK in terms of broadband and telephony services but will need far more time than I, personally, have available right now. There are so many 'free broadband' offers that it's difficult to actually work out what is being offered and how to separate the different 'bundle' components to determine what the cost to the end user is of any specific service. What is apparent, or appears to be apparent, is that the UK service providers are budgetting around GBP 16.00 (around $A34.00) for an 8 mbps ADSL1 or 20 mbps ADSL2 service as the most acceptable cost of a broadband service (of itself) once you strip out the costs of the other 'bundled' components.
Given the much lower 'port' costs and much lower IP costs this seems to be a relatively easy to achieve target price for an end user broadband service. However, as far as I can see so far, no provider is offering a strictly broadband only service - they offer broadband as part of a bundle (mainly voice and mobile but also broadband and Pay TV and broadband and HSPA and mobile). This is just going by the ads in the newspapers and magazines.
My, 'back of the metaphorical cigarette packet' calculations show that the cost of offering ADSL2 broadband services in the UK are much less than half, much closer to a third, of what they cost in Australia - and this is based on 'start up' volumes rather than 'mature' volumes.
We definitely pay a premium to live in Australia when it comes to basic techology services.
[PS: This is the 366th (2008 is a leap year) consecutive daily entry I have made since I commenced this blog and I therefore, subject to adjudication of the content of the last 15 or so entries, have won the bet I made last time I was in London a little over a year ago. It has been an interesting experience and a true test of self discipline - it has also, as promised, delivered all of the benefits listed in the original documentation.]