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Wednesday, June 20, 2007

Plusnet Adds more BT Central Capacity

Plusnet, which is now part of BT, has announced that it has added a STM-1 BT Central to compliment its current five STM-4’s. This gives a raw capacity of 3,265-meg of BT Centrals. Of course all of this is not usable to end-users because of the overhead which I explained in more detail here.

A STM-4 central costs on the new BT pricing £1,162.6k per annum rental in addition to the £175k install charge and a STM-1 (actually a STM-4 set at STM-1 speeds) costs £290.2k per annum rental in addition to the £175k install charge; this means that Plusnet is paying BT Wholesale £6.1m per annum in BT Central costs alone.

In addition to this, Plusnet will be paying £7.63 per month line rental per customer with a £1.24 per month per customer rebate for customers using the busiest 1,016 BT exchanges. Installation costs for each customer stands at £34.86.

Plusnet in its last reported accounts (Jun-06) said that it had 196k broadband customers some of which would have been unbundled on the Tiscali LLU deal.

I have worked out some scenario’s allowing for growth in the Plusnet base since Jun-06 for average BT Wholesale charges per customer and assuming a 70% line rebate take-up:
  • 200k customers - £9.31/month (ex-VAT) - BT Wholesale Annual Revenues - £22.3m
  • 250k customers - £8.80/month (ex-VAT) - BT Wholesale Annual Revenues - £26.4m
  • 300k customers - £8.46/month (ex-VAT) - BT Wholesale Annual Revenues - £30.4m

This is before any IP-Transit costs, own Internet Infrastructure, Customer Acquisition Costs, Back Office or Admin Costs.

In other words, life is still extremely tough for IPStream and no doubt DataStream communications providers.