The Australian Estimate

It is worth commenting briefly on one small matter brought up by this Computerworld article about Vodafone’s submission: Vodafone expresses doubts about shape of broadband plan.

“The actual quantum of investment required is not yet clear. Based on the estimates of independent expert Dr Murray Milner, the real cost of the investment may be as high as $5 to $6 billion,” it says. “In Australia, the government has announced a total requirement of A$43 billion to reach 90% of homes which when mapped to the New Zealand context indicates a figure closer to $9 billion. There is clearly more work to be done on the business case.”

$43 billion is certainly the upper limit. More realistic estimates, based on real-world experience in deploying FTTH, both in Australian brownfields and greenfields, put the likely cost at less than half of this figure. So simply scaling that figure to fit New Zealand isn’t advisable.