FTTP could save $700m a year in maintenance

The NBN could generate substantial savings due to the lower maintenance costs associated with a fibre-to-the-premises solution, according to a new report

A fibre-to-the-premises (FTTP) National Broadband Network (NBN) could save up to $700 million per year in telecommunication maintenance, according to a new report released today by BIS Shrapnel.

The Maintenance in Australia 2012 to 2027 report states the NBN will be a game-changer in the telco sector due to the dramatically reduced maintenance associated with a FTTP network.

Adrian Hart, senior manager at BIS Shrapnel, told Computerworld Australia BIS Shrapnel had calculated maintenance costs of the copper network to total $700 million to $1 billion per year.

“As such, the introduction of an NBN would probably see a reduction of that cost quite substantially,” he said.

“Based on our estimates and our surveys with contractors and organisations in the telecoms industry, we believe that we could save in the vicinity of $600 to $700 million a year in telecoms maintenance that is currently undertaken on the copper network but could probably be saved under a more technological solution such as the fibre optic NBN.”

Hart cited substantial costs associated with copper maintenance due to maintenance being ‘reactive’ to issues such as wet weather and natural disasters. The aging nature of the copper network would also mean it would require more extensive reactive maintenance over time, he said.

“What our research discovered was that the introduction of an NBN that would involve a fibre-to-the-premises solution and hence remove the copper network out of the equation would reduce the number of reactive calls for maintenance. It wouldn’t remove all of them, but it would certainly put a big chunk of those reactive calls away, particularly as it relates to water and other things that can affect the network,” he said.

The BIS Shrapnel calculation of up to $1 billion per year being spent on telco maintenance was derived from surveys and its own analysis of Telstra’s operations and budgets, Hart said.

He said Telstra experienced a substantial increase in its operations budget due to the Queensland flood and cyclones and maintenance tasks associated with the copper network. If a fibre network had been in place, the cost for repairing the network would have been much lower due to the copper being highly susceptible to water damage, according to Hart.

“I have no doubt that a fibre network would have been better able to cope with the water issues related to some of those concerns and some of those events,” he said.

Due to the greater data and voice traffic fibre would carry, compared to copper, Hart said there will still be a concerted effort to ensure the fibre optic network is maintained due to the cost of downtime if there are faults on the network. This would mean around $200 million to $300 million would need to be spent per year on maintaining a maintenance backbone and other associated operations.

“A lot would depend on how often the fibre was affected by unforeseen events such as if it was dug up accidentally, but that occurs with the copper network pretty much as well as what the fibre network would be. In terms of water damage and other aging aspects of the copper network, the fibre-to-the-premises solution would be far simpler to maintain,” Hart said.

However, Hart said a fibre-to-the-node network could dramatically impact on any maintenance cost savings due to the solution still employing copper to the premises. This would result in additional maintenance costs associated with maintaining that piece of the copper network.

“We don’t have an estimate of fibre-to-the-node versus fibre-to-the-premises [solution], but you could be looking at several hundred million dollars worth of difference between the two strategies,” Hart said.

Hart expects telecommunications costs to decline more significantly from 206/17 as users migrate to the NBN.

Follow Stephanie McDonald on Twitter: @stephmcdonald0

Follow Computerworld Australia on Twitter: @ComputerworldAU

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