The marketing cost includes staff cost and advertising costs. Maintenance is approximated as 2% of the capital investment.
The extent to which costs incurred by the competitive network operator, duplicate expenditure already made by the main network provider (HKT) are summarized below.
Technical staff and maintenance
The only portion of these costs which would be duplicated are those required to support the capital equipment which is duplicated. The part of the technical staff which is duplicated is that portion needed for the installation and supervision of the building installation and network engineering and planning and is considered to be approximately 10% of the total cost. The maintenance cost which is duplicated is that portion which is needed for the fibre optic network and the duplicated cost of wiring up a building. It has been BAH's experience that most of the maintenance cost is related to the line equipment of the network and thus would only be incurred when a customer is connected, which implies that the maintenance cost is not duplicated to any great extent. BAH estimates that only 10% of the cost is duplicated in this way.
Service centre and billing system
The recurrent cost for the service centre is not considered to be duplicated since the largest component of the cost is staff and office related costs. These costs would be incurred by either of the network operators and are to a large extent related to the number of customers; they are hence a non duplicated cost. On the other hand, about half of the billing system cost is duplicated since it is related to maintaining a customer database which would overlap the database of HKT.
Marketing
The marketing cost is considered to be entirely duplicated since there would be practically no marketing without competition.
4.4
PROVISION OF LOCAL AND INTERNATIONAL TELECOMMUNICATIONS SERVICES
(SCENARIO 5)
The incremental costs of providing international telecommunications once a domestic network has been established (scenario 4) would include the following five components:
* An earth station providing a link to the international services via
satellites
*
An earth station site, including the actual purchase of the land as well as additional costs to provide the proper environment (power, etc.)
- 103 -
No comments yet.
Private notes are available after approval.