4.3.3
Fibre optic network
A second network operator would have to install its own high capacity junction network and would not share any facilities or capacity with the existing fibre optic junction network. Furthermore, HKT's expansion of its fibre optic network would not be influenced by the presence of a second fibre optic network. BAH concludes that the entire cost of the second fibre optic network would be duplicated.
Building installation
The cost to serve a building would consist of the wiring, cabling and equipment cost. For newly constructed buildings, each of the network operators would provide wiring and cabling to the building, as well as a provision for equipment installation, in anticipation of serving part or all of the building once it is occupied. For those buildings which have already been constructed, a second network operator would wire up part of the building and would provide the necessary electronics when it receives a sufficient demand for its services in the building. This will result in HKT having some stranded capacity within that building. From these observations, BAH estimates that there will be a 15% duplication cost for the building installation.
Variable Cost per Building
As described previously, the variable cost per building is the cost for providing equipment within the building to serve each customer. This cost is not a duplicated cost since for a given demand level, it would be incurred by one operator or the other, not by both.
Switching equipment
As in the case of the variable cost, the per line in service cost of switching equipment is not duplicated since it would only be incurred by the network operator which serves that particular line.
Service centre and billing system
Both of these costs would need to be duplicated by a second network operator.
Recurrent costs
The size of the technical staff is a function of the number of lines which the switch is expected to serve, and is approximated as seven staff members per 1000 lines. BAH has assumed that through technological advances, particularly in the area of network management and control and computerized diagnostics, the cost of providing a technical staff will decrease in real terms by 3% per year.
The operating cost of the service centre includes the costs of the service staff as well as rent and leasehold improvements. The facilities which house the switch also requires leasehold improvements, primarily, power conditioning and power backup as well as air
conditioning. These costs have been included in the cost of the service centre.
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