Upgrading exchanges

glineli · 26-11-2007 11:41AM #1

Hi

I am just wondering, what exactly is involved in upgrading exchanges. Is it a weeks work, an hours work? And roughly how much does it cost?

cheers

zugvogel · 26-11-2007 12:07PM

glineli wrote: »

Hi

I am just wondering, what exactly is involved in upgrading exchanges. Is it a weeks work, an hours work? And roughly how much does it cost?

cheers

I was talking to an Eircom engineer who was doing some of this work on my local exchange recently. He said it takes about 2 weeks plus some time for testing. There were three guys working away at it and it seemed to involve moving a lot of wires. There was a right pile of spaghetti hanging from some trunking where these guys were working. How they manage to keep track of what’s what I’ve no idea

No idea about he cost I’m afraid.

kaizersoze · 26-11-2007 12:21PM

Going by their last announcement, they were investing €30 to do 319 exchanges. That gives an average cost of around €95,000 per exchange.

Some are more expensive and take longer than others depending on location, size of building, fibre availability, etc. When everything is in place installing the DSL gear is fairly quick.

glineli · 26-11-2007 12:24PM

cheers lads, good to have an idea

cheers

Ludo · 26-11-2007 01:21PM

kaizersoze wrote: »

Going by their last announcement, they were investing €30 to do 319 exchanges. That gives an average cost of around €95,000 per exchange.

€30 sounds about right for Eircom

kaizersoze · 26-11-2007 01:41PM

Ludo wrote: »

€30 sounds about right for Eircom

Thats just for the coffee and biscuits.:)

€30 million to do the work.:p

zugvogel · 26-11-2007 02:40PM

kaizersoze wrote: »

Going by their last announcement, they were investing €30 to do 319 exchanges. That gives an average cost of around €95,000 per exchange.

Some are more expensive and take longer than others depending on location, size of building, fibre availability, etc. When everything is in place installing the DSL gear is fairly quick.

Hmmm €95000...
I believe an exchange with say 400 lines (customers) would be considered small.
Of the 400 lines say that 33% will fail the DSL line quality test because of pair gains, distance and bad lines. And of the rest according to Eircom only something like 50% of those who can get broadband actually do subscribe to it (I think the Eircom guy on ToDay FM with Matt Cooper said this last week).

So the cost per DSL user is

67% of 400 lines is 268.

And of these 268 only 50% take it up, which gives 134 paying subscribers.

Cost per subscriber is €95000/134 = €709.

I think Eircom are charging €15.00 per month for bband in a bundle

Which means it would take Eircom 4 years to break even.

Obviously this is total guess work on my part but I wonder does this reflect the situation from Eircoms point of view? Personally I think the 50% uptake is to low as nearly everyone I know who can get bband does so.

ardmacha · 26-11-2007 05:49PM

Personally I think the 50% uptake is to low as nearly everyone I know who can get bband does so.

Hardly, only about 60% of household have a computer. Not all of those use the Internet, but of those that do some do some very rarely and might not get broadband.

kaizersoze · 26-11-2007 07:05PM

zugvogel wrote: »

Which means it would take Eircom 4 years to break even.

Aye. It's called a long term investment.

thebman · 26-11-2007 08:11PM

4 years is a medium term investment IMHO. Its not a big risk given they have a monopoly on land lines.

thefinalstage · 26-11-2007 08:51PM

Upto one year is a short-tem investment.

Between 1 and 5 years in a medium-term investment.

Upto thirty is a long-term investment.

ArseBurger · 27-11-2007 08:30AM

zugvogel wrote: »

Hmmm €95000...
I believe an exchange with say 400 lines (customers) would be considered small.
Of the 400 lines say that 33% will fail the DSL line quality test because of pair gains, distance and bad lines. And of the rest according to Eircom only something like 50% of those who can get broadband actually do subscribe to it (I think the Eircom guy on ToDay FM with Matt Cooper said this last week).

So the cost per DSL user is

67% of 400 lines is 268.

And of these 268 only 50% take it up, which gives 134 paying subscribers.

Cost per subscriber is €95000/134 = €709.

I think Eircom are charging €15.00 per month for bband in a bundle

Which means it would take Eircom 4 years to break even.

Obviously this is total guess work on my part but I wonder does this reflect the situation from Eircoms point of view? Personally I think the 50% uptake is to low as nearly everyone I know who can get bband does so.

Making the assumption that the above numbers are correct, which I doubt by the way. (DSLAMs are not cheap and neither is terminating equipment for backhaul etc...)

You are not taking into account manpower required for the operational upkeep of the service ongoing. The support costs associated with the equipment required to provide the service. Software licenses and upgrades. i.e. general opex added to the initial capex for the upgrade and so on.

thegills · 27-11-2007 02:42PM

Most operators don't pay for the DSLAM up front; they tie the vendor into a long term deal based on customer numbers. The vendor makes the money on the customer modem.

zugvogel · 27-11-2007 02:51PM

ArseBurger wrote: »

Making the assumption that the above numbers are correct, which I doubt by the way. (DSLAMs are not cheap and neither is terminating equipment for backhaul etc...)

You are not taking into account manpower required for the operational upkeep of the service ongoing. The support costs associated with the equipment required to provide the service. Software licenses and upgrades. i.e. general opex added to the initial capex for the upgrade and so on.

Would you say the figures are to optimistic? Why are Eircom doing the roll out at all then? Given the rate of technology change I thought that 4 years would be to long given that by the time Eircom turned a profit, the equipment might be old when compared with the latest hot technology. One way of looking at it is that Eircom just want to hang onto as a many paying customers (line rental) as possible. They may make a loss on the DSL but still keep the voice and line rental revenue coming in - especially the line rental. When wirelesss/mobile phone calls become the same price as land line calls why would anyone want an expensive land line at all?

By the way I don't have any connection with the telecoms industry at all - I'm just musing about Eircom’s motives and working of the 95K figure mentioned earlier.

Zug

ArseBurger · 29-11-2007 01:59PM

thegills wrote: »

Most operators don't pay for the DSLAM up front; they tie the vendor into a long term deal based on customer numbers. The vendor makes the money on the customer modem.

Eh, no. Vendors tie you in up front. No idea where you got this from. I know of no telecommunications operator in Europe that has an arrangement like this currently. (note: Ericsson used to do this, but not for about ten years. Although, they have moved back into their professional services cycle - so it could happen again soon)

zugvogel wrote: »

Would you say the figures are to optimistic? Why are Eircom doing the roll out at all then? Given the rate of technology change I thought that 4 years would be to long given that by the time Eircom turned a profit, the equipment might be old when compared with the latest hot technology.

Most of this kit is software upgradable. *DSL will be around for a long time yet. You have to move to new technology sometime.

zugvogel wrote:

One way of looking at it is that Eircom just want to hang onto as a many paying customers (line rental) as possible. They may make a loss on the DSL but still keep the voice and line rental revenue coming in - especially the line rental. When wirelesss/mobile phone calls become the same price as land line calls why would anyone want an expensive land line at all?

It's called multi-play. And you're right. The future is in value added services (or VAS).

Upgrading exchanges

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