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LLU costing

willhome
Grafter
Posts: 272
Registered: 06-08-2007

LLU costing

after seeing the insightful break down of the 622mb pipeline and costs per gb etc etc.

With the LLU such that bethere and ukonline have done. pricing being very cheap.

how do they save money?

is where something that they dont have to pay bt for or what?
4 REPLIES
Plusnet Staff
Plusnet Staff
Posts: 12,169
Thanks: 18
Fixes: 1
Registered: 04-04-2007

LLU costing

Hi,

With LLU there are two options. You can fully unbundle a line, or share it.

A fully unbundled line (Metallic Path Facilities or MPF) allows the ISP to offer the customer both voice and broadband service.

A shared line (Shared Metallic Path Facilities or SMPF) allows the ISP to provide the broadband with the voice service remaining with BT Retail.

Each of these services has a one off connection charge payable to BT Wholesale by the ISP and then a yearly rental fee. (£15.60 per year for SMPF and £105.09 for MPF.)

At each exchange an ISP wants to unbundle they need to install their own DSLAM equipment, for example you can buy a Zyxel IES 3000 DSLAM starting around £1,000 plus £1,595 for each 24 port ADSL2+ line card.

Then from there you need to run a fibre link from each exchange into your own network, I don't know how much this will cost, but under Standard Charging BT Wholesale charge £45,000 for a 155Mbps link so I think that's a reasonable price to estimate.

So to gear up an exchange for 360 ADSL2+ customers we would pay out the following (on SMPF)

360 x £15.60 - yearly rental
15 x £1,595 - line cards for the DSLAM
1 x £1,000 - DSLAM chassis/cabling/psu/etc
1 x £45,000 - 155Mbps links

= £75,541

75,541 / 360 / 12 = £17.48 per month in the first year, in the second year you can discount the line card and DSLAM so this reduces to £11.72

Obviously this is only a rough calculation, and doesn't include the cost of ongoing maintenance of the DSLAM or any other on site work that may be required, plus the cost of the fibre link is probably going to be less. It also assumes that a 155Mbps link is shared between 360 ADSL2+ customers (taking an average speed of 18Mbps and applying a 50:1 contention ratio on the 155 link and discounting the overhead).

If you assume the average line speed is about 9Mbps and have 720 customers sharing the 155Mbps link then the first year monthly cost is £12.28 and second year monthly cost down to £6.50.

I should also note that you still need to have all your normal infrastructure (transit links, portal, RADIUS, mail, etc.) as well as staff and building costs, and VAT to add on.
shellsong
Grafter
Posts: 2,191
Registered: 03-08-2007

LLU costing

One problem that could well afflict LLUs appears to be an iniquitous rating system for lit fibre http://www.itweek.co.uk/itweek/comment/2140206/fibre-tax-blocks-bt-rivals :x :?
willhome
Grafter
Posts: 272
Registered: 06-08-2007

LLU costing

but you dont pay bt for the line per year as its your line?
Plusnet Staff
Plusnet Staff
Posts: 12,169
Thanks: 18
Fixes: 1
Registered: 04-04-2007

LLU costing

As a customer under SMPF you would still pay BT Retail for your line rental as they still provide the voice service. With MPF the ISP is providing the voice service so you would be paying them whatever they charge for the voice service instead.