EXHIBIT 5.1 ECONOMIES OF SCALE IN LOCAL TELECOMMUNICATIONS NETWORK
Net Present Value (in 1988) of costs to the year 2007; voice telecommunications service commencing in 1995 and connecting 410,000 lines by 2007.
HK$ 1,140
million
Hub Sites
23
Fibre Network
42
Billing System
27
0%
Service Centre
20
Economies of scale = HK$196 m (17.2%)
Marketing
32
HK$944
Billing Operations
7
50%
million
Fixed Cost per
83
85%
4
Customer Premise
71
Technical Staff
275
90%
248
Maintenance
96
90%
86
Service
Operations
42
42
Switching
172
Variable Cost per Customer Premise
321
100%
172
321
Costs of second telecoms network (Scenario 4, not providing Cable TV Services)
Costs of serving same customer base by expanding main telecoms network (Scenario 1, not providing Cable TV Services)
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