EXHIBIT A-5

CAPITAL AND OPERATING COSTS FOR SCENARIO 4

(HK Millions)

1994

1995

1996

1997

1998

2003

2007

Capital Costs

Fibre Optic Network

18.7

12.4

0.0

0.0

0.0

0.0

0.0

Fixed Cost per Building

28.0

18.6 32.6

7.0

7.0

4.7

2.3

Variable Cost per Building

0.0

47.0

72.7

81.0

79.2 40.3

22.3

Switching Equipment

3.5

24.0

37.2

41.7

41.0

21.4

12.1

Billing System

37.4

0.0

0.0

0.0

0.0

0.0

0.0

Service Centre

26.7

0.0

0.0

0.0

0.0

0.0

0.0

$114.3 $102.0 $142.5 $129.7 $127.2

$66.4 $36.7

Recurrent Costs

Technical Staff

0.0

7.5

17.0 27.3

37.1

59.4

66.9

Service Centre

0.0

6.5

6.5

6.5

6.5

6.5

6.5

Billing Centre

0.0

1.1

1.1

1.1

1.1

1.1

1.1

Marketing

0.0

5.0

5.0

5.0

5.0

5.0

5.0

Maintenance

2.3

4.3

7.2

9.8

12.3

19.5

23.1

$2.3 $24.4

$36.8

$49.7 $62.0

$91.5 $102.6

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TOTAL:

$116.6 $126.4 $179.3

$179.3 $179.4 $189.2 $157.9 $139.3

NOTE: Marginal Costs over Scenario 2

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