Vodafone’s rural cell tower costs questioned
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Why do Vodafone’s rural cell towers cost so much?
That was the question asked by telecommunications consultant and blogger Jonathan Brewer at a session on rural broadband at the InternetNZ NetHui last week.
Brewer says he attended the CommunicAsia telecommunications conference in Singapore last month and discovered that in other countries rural cell towers are being built for as little as US$10,000.
In New Zealand he has been told by Vodafone – who together with Chorus won the $300 million Rural Broadband Inititative – that a cellphone tower costs $480,000 to build.
Brewer later emailed Computerworld more details about the towers built overseas. “US$10,000 ($12,500) in India for a 2G site to cover a village. Includes solar power and satellite backhaul.
“US $25,000 ($31,300) used in Indonesia for a 2.75G (GPRS/EDGE) to cover a village. Again includes solar and sat backhaul.”
“Why can’t New Zealand come up with a $50,000 site? What are we doing wrong?” he asks.
Vodafone wholesale manager Steve Rieger, who attended the NetHui session and who oversaw the telco’s RBI bid, told Computerworld that a rural cell tower costs between $300,000 and $500,000 to build. To date Vodafone have built 14 new towers and upgraded 80 existing towers as part of the RBI.
He says the price is dependent on a range of issues, including geography, ability to build an access track (for maintenance vehicles), electricity and the resource consent process.
In addition, the RBI towers are required to hold the equipment of six retail service providers. “It’s government funded so you can’t limit them. So we build them heavier, bigger and with a much stronger footprint.”
The Vodafone towers are 25 metres tall on average. Rieger says there are 295,000 houses which are considered rural or remote and of that 86 percent will be covered by RBI. “There are 40,000 households that haven’t got an immediate solution,” he says. “They’ve got satellite as an option but they don’t generally (buy it) because they say it’s too expensive.”
During the NetHui session a number of delegates queried the low download speeds available to rural users. Under the RBI, the telcos are expected to deliver a maximum of 5Mbps, but Rieger told the audience that this was “a technology spot in time and we’re on a journey of ever increasing speed and performance.”
He says that if Vodafone is successful in securing 700MHz spectrum (the telco has said previously it wants a 20MHz chunk of the 45MHz that is available), at peak times rural broadband users could expect speeds of up to 20Mbps.
Computerworld asked Rieger if Vodafone would commit to rolling out LTE technology (which is enabled by the 700MHz spectrum) in rural areas first if it got 700MHz spectrum.
“I’m going to give you an opinion on this, not the company philosophy because if you quote me as that I’d be doing the company a disservice. My opinion is we will do just that, because I think its the right thing to do,” Rieger told the NetHui audience.
ICT Minister Amy Adams told Computerworld in February that during the 700MHz auction process government will be looking for bidders who can provide plans that contribute to better productivity gains for New Zealand.
“It’s not about who can bid the most. I’m not interested in a high bid that’s not going to deliver much for New Zealanders,” she told Computerworld.
A spokesperson for her office says that a paper on the terms of the 700MHz spectrum auction – which is also the subject of a Waitangi Tribunal claim – is due before cabinet shortly.
Fibre to the door it a ridiculous waste of money. All we need is a fibre loop round each island with copper between the local exchange and the houses, cheap cheap cheap.
Why are we letting the companies that stand to make the profit on these things make the recommendations to the pig ignorant politicians?
Posted by Anonymous at 15:30:19 on July 16, 2012
As for Vodafone's site cost, the difference between New Zealand LTE towers and the 2.5g foreign towers are simple, access roads need a land survey and engineer planning (about $5000) then an digger and other plant to make the track, and prepare the site ($80 per hour per machine), the equipment in the tower and the tower itself, need to also be of a high standard.
Yes Vodafone is using the governments money to build out its network in places where it wouldn't normally build out due to it being a Company and not a SOE, and it most likely not make a profit from having towers in that area, and being a Company its priority it to make money for its shareholders, If the government was doing the right thing it should not have sold Telecom and kept it as a wholesaler and kept the infrastructure as it does with roads. And the UFB would have been done already as part of standard maintenance.
And we already have a great Fibre loop, and fibre to the Node/copper from the exchange is a waste of money and not capable of handling tomorrows data needs.
Posted by Clint at 22:55:35 on July 17, 2012
Right. We all need to be entertained.
We want to be diagnosed over a wire, not face to face where the dr can do some checks and so on too.
Do you actually know there are quite a few people in this country stuck on dial-up? None of them have suffered in a big way.....They may think they have, being deprived of Facebooks and warez, but no, actually, their lives have not come to a grinding halt.
Posted by Anonymous at 9:23:45 on July 18, 2012
look at the diff in 3g packet rates between competitors .
2Degrees vs VF [ 2Gb = 20 $ vs 1 Gb = 700$ ON A PREFERRED BUSINESS ACCOUNT for VF ] .
WRONG WRONG WRONG
Posted by anony mouse at 14:09:39 on July 16, 2012
Fixed Point-to-Point or Point-to-Multi point applications are the domain of Wimax and/or unlicensed band Wi-fi.
Vodafone do Cellular coverage not Wi-max. As part of extending their network Wi-max does not fit into that equation.
I guess the wrong question was asked at the beginning of the whole program if the price is unacceptable. Perhaps as we are hearing the question should have been - whow can we make a wireless broadband local loop as cheap as possible for rural dwellings?
Posted by Anonymous at 12:16:06 on July 16, 2012
I live in the middle of Tamatea, Napier and struggle to get one bar of coverage on my phone.
A vodem indicates "very Poor" signal as well.
Incoming cellphone calls often go straight to voicemail without the phone even ringing..
Posted by Chris Morris at 12:14:18 on July 16, 2012
Posted by Jonathan Brewer at 9:18:27 on July 16, 2012
They're not however a good solution for settlements like Omakere, Matahiwi, Makarora, or populated valleys like the Awatere or Waihopai. And they don't help anyone living in really rough terrain, where only the sheep stray to the hilltops that have strong coverage.
RBI was always a numbers game, maximizing coverage for the dollar, and intentionally leaving out the harder to get bits. What's unfortunate is those harder bits still need coverage - and in many cases they have the resources to pay for a reasonable solution.
The $10-$25K US cell sites mentioned above are economical, not cheap, and they're nothing cutting edge. Major vendors have appropriate solutions, including Alcatel-Lucent with their 9364 series micro sites.
The problem is a lack of innovation, and it's pretty obvious by the way the RBI was negotiated, the MED did nothing to help in this respect.
Posted by Jonathan Brewer at 9:16:55 on July 16, 2012