EXHIBIT 1.4 ASSESSMENT OF ECONOMIES OF SCALE AND INTEGRATION
(1) Economies of scale in telecommunications network provision
Costs incurred only in
competitive option
eg. fibre distribution
network
0%
Economies
of scale
Costs which are higher in competitive option
eg.maintenance costs
X%
Costs common to
both option
eg.per line switching cost
100%
Costs of
competitive network
Incremental costs of monopoly network
(2) Economies of integration in joint provision of cable TV and telecommunications networks
Costs incurred only in separate network option
Costs which are higher in separate network option
eg.horizontal ducting
X%
Costs common to both options
eg.vertical ducting
100%
Economies of integration
Costs of separate cable TV network
Costs of cable TV network Integrated with main telecommunications network
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