Fibre to the home could cost $5b, claims report

Piggybacking off existing utilities could provide a cost-efficient answer

A fibre-to-the-premises network built from scratch is likely to cost more than $5 billion, a study conducted by InternetNZ has concluded, and government may have to invest 75% of the cost for the operator to get payback.

The report investigates the investment required under differing scenarios to introduce high-speed broadband of at least 100Mbit/s for domestic users and 1Gbit/s for commercial users for 75% of the population within 10 years.

A more realistic scenario than a from-scratch build for FttH, the report finds, would be to use the infrastructure of utility companies such as electricity lines companies.

The report’s author, Network Strategies, calculates the cost of such a network as a little over $3 billion, with about half the investment met by government.

“These deployments tend to arise from either expanding the internal communications networks used by the company, or through taking advantage of the synergies with the company’s existing infrastructure, for example laying fibre at the same time as rebuilding or repairing parts of the power network,” the report says.

In the case of public utility companies, there tends to be more of a public good view taken, and this could result in acceptance of a longer payback period and a less onerous cost.

The InternetNZ report considers the various proposals already put forward for funding fibre networks, by the New Zealand Institute and the two major political parties — including the Labour-led government’s Broadband Investment Fund, the fate of which is now in the hands of the National government and still uncertain.

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