DEmand Lead Rollout of FTTC

Why does not BT introduce a demand lead FTTC scheme. People would show their commitment to subscribing by putting down a £30 deposit When enough people have signed up the Cabinet is enabled. The money will help provided the revenues for the rollout and will one enbbled will discount the first years bill by £30

I think you mean demand-led, not demand lead.

Arithmetic:-

Maximum number of connections per cabinet, 288.
Maximum deposit value, (paid to which BT company?), £8630.
Discount to consumers in first year, £8630.
Cost of provisioning one cabinet at an otherwise non-enabled exchange, beyond my estimating capabilities.
Cost of provisioning one cabinet at an exchange with existing FTTC, high.

Minimum number of depositors? You haven't made a suggestion.

Openreach marginal revenue per line, (extra rental compared to that for ADSLx), low.

ISP giving that discount to the consumer? One of a large number, all of which would need to be in the accounting chain, including even tiny resellers of non-BT companies.

This doesn't sound like a goer to me, sorry.

Edited by RobertoS (Fri 21-Jan-11 18:54:19)

I think the cabinet is about £16k on the back of a truck.

Discount was perhaps the wrong world to use it would be the £30 depoist they paid being in effect used to discount the first bill.

The deposits would not fully fund it does give BT some cash flow to assist the roll out and if people but a £30 deposit it shows commitment to tke FTTC when it becomes available

I realised what you meant by discount, hence my question as to how the refund got to the ISP in question given the hundreds of possible ones the customer could choose.

You still haven't specified the required number of deposits - which by definition has to be below 289.

I hardly think 288 x £30 is significant within BT Openreach's hourly cashflow, never mind the period between deciding to schedule an FTTC cabinet and go-live of that cabinet with associated BT Wholesale backhaul.

Actually it isn't cashflow. It is additional working capital you are talking about. Cashflow is each individual receipt of £30 and each item of direct expenditure on that cabinet.

Edited by RobertoS (Sat 22-Jan-11 15:50:26)

In reply to a post by RobertoS:

I realised what you meant by discount, hence my question as to how the refund got to the ISP in question given the hundreds of possible ones the customer could choose.

You still haven't specified the required number of deposits - which by definition has to be below 289.

I hardly think 288 x £30 is significant within BT Openreach's hourly cashflow, never mind the period between deciding to schedule an FTTC cabinet and go-live of that cabinet with associated BT Wholesale backhaul.

Actually it isn't cashflow. It is additional working capital you are talking about. Cashflow is each individual receipt of £30 and each item of direct expenditure on that cabinet.

Indeed, can't see how BT, even if they wanted to, could take any form of deposit from a customer who may go to another ISP. Additionally if they took a deposit that locked you to Infinity then it wouldn't be long before others were complaining about that.

To address the original post, BT know how many lines are on each exchange (roughly) and know how many go to each cabinet. They can correlate this with current ADSL connections and see a very general indicator of "demand".

If you take a hypothetical cabinet with 200 lines on it and BT analyse the numbers and see 120 lines on that cabinet have ADSL they might deem that to be a promising candidate to upgrade. Similarly if they see other cabinets adjacent to that one with similar levels of broadband users they might see the area as "viable".

On the other hand if a cabinet only has 20 ADSL users on it due to demographics (perhaps it serves a few old peoples cul-de-sacs or the like) then they'll likely skip it enitrely.

There is a cost of the fibre, power, cabinet itself and the cost of man/woman power to install it all which likely amounts to a pretty tidy some considering it seems to take a few weeks to get a cabinet in place and set up along with more weeks in between where work seems to be stopped. It's just a guess on my part but it will probably take a few years worth of subscriptions before BT "pay off" the cost of the cabinets from user revenues.

At least BT have the advantage of owning a literal mountain of copper wire that is worth a fortune. Eventually when they get round to going to fibre only they can begin to start selling that off.

Edited by orly (Sat 22-Jan-11 20:56:31)

can see where you are going, however there will be some exchanges and even some cabinets that just not worth upgrading even if you have 100% of those lines upgraded to FTTC.

What I think would make sense is a system where people could register their interest for FTTC and once a the cost effective threshold +20% of interested parties a deposit of £100-150 would have to be paid. Once enough parties agreed (i.e. the number required to make it cost effective) to paid the exchange would be enabled and once the party signed up to an FTTC service the money would be refunded after 45 days (to stop people cancelling and still get the deposit back).

This would not need much work as once set up it could be autmatic and have access to open reach database

£100-150 sounds like a lot but without that you may get parties signing up that would be willing to lose less. Least to me 30£ is not that much lol less than 1 night out, where 150£ would hurt

In reply to a post by orly:

In reply to a post by RobertoS:

I realised what you meant by discount, hence my question as to how the refund got to the ISP in question given the hundreds of possible ones the customer could choose.

You still haven't specified the required number of deposits - which by definition has to be below 289.

I hardly think 288 x £30 is significant within BT Openreach's hourly cashflow, never mind the period between deciding to schedule an FTTC cabinet and go-live of that cabinet with associated BT Wholesale backhaul.

Actually it isn't cashflow. It is additional working capital you are talking about. Cashflow is each individual receipt of £30 and each item of direct expenditure on that cabinet.

Indeed, can't see how BT, even if they wanted to, could take any form of deposit from a customer who may go to another ISP. Additionally if they took a deposit that locked you to Infinity then it wouldn't be long before others were complaining about that.

To address the original post, BT know how many lines are on each exchange (roughly) and know how many go to each cabinet. They can correlate this with current ADSL connections and see a very general indicator of "demand".

If you take a hypothetical cabinet with 200 lines on it and BT analyse the numbers and see 120 lines on that cabinet have ADSL they might deem that to be a promising candidate to upgrade. Similarly if they see other cabinets adjacent to that one with similar levels of broadband users they might see the area as "viable".

On the other hand if a cabinet only has 20 ADSL users on it due to demographics (perhaps it serves a few old peoples cul-de-sacs or the like) then they'll likely skip it enitrely.

There is a cost of the fibre, power, cabinet itself and the cost of man/woman power to install it all which likely amounts to a pretty tidy some considering it seems to take a few weeks to get a cabinet in place and set up along with more weeks in between where work seems to be stopped. It's just a guess on my part but it will probably take a few years worth of subscriptions before BT "pay off" the cost of the cabinets from user revenues.

At least BT have the advantage of owning a literal mountain of copper wire that is worth a fortune. Eventually when they get round to going to fibre only they can begin to start selling that off.

The money would not go back to an ISP but to BT Openreach as they are the ones paying for the infrustructure

Clearly BT would have to limit the scheme to where its is realistically viable as you say in some areas without subsidises it may not.

A trigger level would have to be set which may be different for different areas as costs will vary a lot. I think a figure of a £100 to £150 is far to high. You will not get many people prepared to put that much down. I woulds set it at £50 maximun. Clearly there would also need to be a means for refunding it to people in some circrmstances such as moving home. Possibly as well a slighly higher charge for the service could be made in the first couple of years. It would have to be quite small though as otherwise I would suspect it would reduce demand

I think the main thing is not the amount of cash the deposits raise as this is quite modest say 700x£50 = £3500. It is more it is showing a real commitment to take the service. They no they will have X number of customers when the service becomes available

http://www.relay-rutlandtelecom.co.uk/registration/p...

Rutland's pre-registration / deposit scheme, for info. That's actually for exchange LLU but they also do sub-loop unbundling with VDSL2 and FTTC.