[kictanet] TEAMS and Open ended circuit

[aki]

Dear Kai,

Thank you for the clarifications, it is a big help on cost implications. I
hope the VISP scenario will create more uptake of purchased capacity
allowing for lower pricing at landing stations to become cheaper.

I think it would be even nicer to do some math which ISPs are not passing
on. I hope to list it soon and corrections are welcome.

Rgds.

Aki
On Fri, Oct 9, 2009 at 7:29 AM, Kai Wulff <kai.wulff at kdn.co.ke> wrote:

>  Aki,
>
> a word from the economist ..
>
> You cannot divide the cost of a system by the capacity one has ... You have
> to divide the cost by the capacity that can be sold ..
>
> Let's assume we sell in the first year 10Gbps of the TEAMS capacity
> (jointly between all operators) and the investors want to have at least the
> return anybody expects from injected cash (I am taking the yields of the
> latest Infrastructure Bond as benchmark).
>
> So:
>
> 130M USD to be returned in 5 years
>
> 1st year = 26 000 000 USD + 4% OaM = 31 200 000 USD
>
> That makes per Mbps and month 260 USD
>
> If we say we can sell 20Gbps then it would be 130 USD ... Let me stick to
> 10 for now ..
>
> Cross Connection in Fujeira between the TEAMS Landing and the SMW4 Landing
> on lease for 4 x STM16 = 200 000 USD per month = 20 USD per Mbps and month
>
> Onward Capacity from U.A.E. to London per STM16 approx. 150 000 USD per
> month = USD 60 per Mbps
>
> Add USD 20 per Mbps for all peering and hosting charges in London and you
> will have: USD 360 per Mbps and month ...
>
>
> This case assumes the 4 x STM16 are sold from day 1 in full .. Surely we
> can assume a straight line take-up that might peak in even 20Gbps after 12
> month, then the first year will still be as above. The second year would be
> in the range of 210 - 230 USD .....
>
> All the above is calculating 0 overheads at the operator's level ..
>
>
> No magic .. Just math ..
>
> Rgds
>
> Kai
>
>
>
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