PUBLIC VERSION
Annex A: Derivation of Operating cost numbers
A1: Table 1 in main text
Total Avoidable Opex
Retail (16% of Avoidable Revenue)
Access Wired Network (12% of Capital)
Access Wireless Network (12% of Capital)
Core Capacity Network (10% of Capital)
Core ESA Direct Network (10% of Capital)
TOTAL 02-03 year
Related Revenue
($000’s)
Amount
($000’s)
2,381,408
Related Capital
($000’s)
3,409,507
380,981
755,854
384,595
381,025
409,141
45,718
75,585
38,460
949,929
Source of Numbers
A1.1 Retail
[
]Telecom Restricted Information
The $381,025k is 16% of the $[
]Telecom Restricted
Information shown in the above table. The numbers above come from the quarterly
revenue files as used by the CC, being total rev (column AU) less interconnect
(column AT).
A1.2 Access Wired Network
This was the sum of all ESA investment from the HCPM output file ‘invbyclu.csv’.
A1.3 Access Wireless Network
From the TSO HCPM output file ‘natlog.csv’ the total number of CNVCs served by a
wireless solution was extracted and multiplied through by the wireless cap
investment (excluding any opex component), as follows;
Category of Line
Residential Wireless Lines
Business Wireless Lines
Number of
Wireless
CNVC’s
22,394
4,063
Wireless
Investment per
Line
[
]Commerce
Commission
Restricted
Information
[
]Commerce
Commission
Restricted
Information
Total Capital
[
]Telecom
Restricted
Information
[
]Telecom
Restricted
Information
PUBLIC VERSION
[
TOTAL
]Telecom
Restricted
Information
A1.4 Core Capacity Network
This amount was extracted from the latest CostPro model – under the heading
‘SumofTotalESACapacityInv’ (see appendix for extract code).
A1.5 Core ESA Direct Network
This amount was extracted from the latest CostPro model – under the heading
‘SumofTotalDirectESAInv’ (see appendix for extract code).
A2: Table 2 in main text – Commission’s number
As Calculated by the CC's TSO Model- Draft Determination 02-03 Model
HCPM Model
6,753
Core - Costpro
1,503
ESA Direct - Costpro
2,475
All cnvc's
10,731
A2.1 HCPM model
The amount of $6,753k was calculated as follows;
Category of Line
Number
Avoided Opex $
per Line
Residential CNVC’s
62,995
[
Business CNVC’s
11,576
[
Residential Wireless CNVC’s
22,394
[
Business Wireless CNVC’s
4,063
[
]Commerce
Commission
Restricted
Information
]Commerce
Commission
Restricted
Information
]Commerce
Commission
Restricted
Information
]Commerce
Commission
Restricted
Information
TOTAL
Total Avoided
Opex ($000’s)
[
]Telecom
Restricted
Information
[
]Telecom
Restricted
Information
[
]Telecom
Restricted
Information
[
]Telecom
Restricted
Information
[
]Telecom
Restricted
Information
Avoided opex per line is that reported used by the CC in their “TSO Draft
Determination 2003” document.
A2.2: Core - CostPro
An opex per line was calculated from the ‘callcost’ column in the TSO input file
‘revbyline.csv’. The opex component as a % of the ‘callcost’ was calculated for each
ESA. This was done by using the CostPro data extracts discussed elsewhere in the
PUBLIC VERSION
report. The extracts provide investment by ESA plus capital charge and opex %’s
relating to the different category of asset. From this data a % was generated for
each ESA by dividing the opex cost component by the overall annual cost (both
capital and opex). Finally this % was then multiplied by the ‘call cost’ amount
reported for each ESA in the ‘revbyline.csv’ file to give an average opex $ per line per
ESA. The $1,503k results when the number of loss making lines in any ESA is
multiplied by the average opex for that relevant ESA.
A2.3: ESA Direct - CostPro
The ESA costs from the input file ‘esacost.csv’, were split into their capital and opex
components. This was done by using the data extracted from the CostPro model –
under the heading ‘SumofTotalDirectESAInv’, and applying the reported opex % for
each asset category. The sum of the asset category opex amounts for non viable
ESA’s was extracted and represents the $2,475k.
A3: Table 2 in main text – Alternative number
A3.1: Retail Avoidable Opex
Retail Avoidable Opex - TSO 02-03 Draft Determination
Category
Avoided revenue
related to CNVC's
($000's)
Residential (62,995
cnvc's))
[
]Telecom
Restricted
Information
Business (11,576 cnvc's)
[
]Telecom
Restricted
Information
Avoided Opex % of
Revenue
Retail Opex Avoided
($000's)
[
]Telecom
Restricted
Information
[
]Telecom
Restricted
Information
16%
16%
95,765
15,322
The amount of $95,765k was generated from the quarterly revenue files. The
average revenue per line (defined as before as ‘total rev’ less ‘interconnect’) for
residential and business lines was applied (by ESA) to the quantity of CNVC’s as
identified in the TSO output file ‘national.csv’.
A3.2: Network Avoidable Opex
Network Avoidable Opex - TSO 02-03 Draft Determination
Avoided
Opex % of
Revenue
Network Opex
Avoided ($000's)
795,764
12%
95,492
Core Network - Res
50,814
10%
5,081
Core Network - Bus
9,220
10%
922
Core Network - Direct ESA Cost
61,151
10%
6,115
Category
Access Network (all cnvc's 74,571)
Avoided Infrastructure
Cost ($000's)
PUBLIC VERSION
916,949
107,610
A3.2.1 Access Network
The amount of $795,764k can be broken down as follows;
Total Access Network Avoided
Access Wired Network (12% of Capital)
Access Wireless Network (12% of Capital)
Total
Related Capital
($000’s)
414,783
380,981
795,764
Opex Amount
($000’s)
49,774
45,718
95,492
The source of the access wireless network capital amount has been discussed
earlier in this report.
The avoidable access wired network capital cost above ($414,783k) was calculated
as follows;
Access Wired Network Avoided - Calculation
From TSO model output file ‘network.csv’ obtain the incremental
cost of wired loss making clusters
Calculate the ‘hanging’ wired infrastructure, as;
1. Take TSO loss from output file ‘national.csv’
2. Subtract the wired cluster loss from output file
‘network.csv’
3. subtract the wireless loss from output file ‘natlog.csv’
4. subtract the ESA cost for those ESA’s that are non viable
– from output file ‘esacost.csv’
Then take the annual charge amount (63,436.7 + 2,195.0) and
restate back to a capital amount. Do this by using an average
annualisation factor (0.158231) obtained from dividing the total
ESA expense (from the HCPM output file ‘expense.csv’) by the
total investment (from the HCPM output file ‘invbyclu.csv’)
($000’s)
63,436.7
2,195.0
414,783
A3.2.2 Core Network – Residential and Business
The average core network investment per line for each ESA was obtained by dividing
the ESA investment (as extracted from the latest CostPro model – under the heading
‘SumofTotalESACapacityInv’ – as discussed elsewhere) by the total number of lines
in the ESA. This average investment per line per ESA was then multiplied by the
number of residential and business CNVC’s in each of the ESA’s to give .
A3.2.3 Core Network – Direct ESA Cost
The non viable ESA’s (as reported in ‘national.csv’) and associated direct ESA cost
(from the TSO HCPM input file ‘esacost.csv’) were extracted. To this ESA cost the
capital charge and opex %’s were applied (using table ‘anncapcostfactors’ from
CostPro at 7.4% WACC) to restate the ESA cost into its capital and opex
components. The capital component is what has been reported in the above table.
A4: Code used
Code used to extract information on total core network investment and direct ESA
investment from the CostPro model.
PUBLIC VERSION
A query derived from the Density Report of CostPro, modified to include the
OpexRate, CapitalCharge, and TotalAnnChargeFactor from the table
tblCOMAnnCapCostFactors for each PlantType. This query was run on the
CommDaftUpdate23Oct2003_7pt1pctWACC version of the model.
The SQL of the query:
SELECT tblSYSHcpmIN.ESA, tblRPTReport.USOACategory,
Sum(tblRPTReport.TotalWorkingInv) AS SumOfTotalWorkingInv,
Sum(tblRPTReport.TotalInv) AS SumOfTotalInv,
Sum(tblRPTReport.TotalESACapacityInv) AS SumOfTotalESACapacityInv,
Sum(tblRPTReport.TotalDirectESAInv) AS SumOfTotalDirectESAInv,
Sum(tblRPTReport.TotalWorkingCost) AS SumOfTotalWorkingCost,
Sum(tblRPTReport.TotalCost) AS SumOfTotalCost,
Sum(tblRPTReport.TotalESACapacityCost) AS SumOfTotalESACapacityCost,
Sum(tblRPTReport.TotalDirectESACost) AS SumOfTotalDirectESACost,
Max(qryDensityLineCounts.Lines) AS MaxOfLines,
Sum([TotalESACapacityCost]/[lines]) AS PerCustCapCost,
tblCOMAnnCapCostFactors.OpexRate, tblCOMAnnCapCostFactors.CapitalCharge,
tblCOMAnnCapCostFactors.TotalAnnChargeFactor
FROM ((tblRPTReport INNER JOIN tblSYSHcpmIN ON tblRPTReport.ESA =
tblSYSHcpmIN.ESA) INNER JOIN qryDensityLineCounts ON tblSYSHcpmIN.Density
= qryDensityLineCounts.Density) INNER JOIN tblCOMAnnCapCostFactors ON
tblRPTReport.USOACategory = tblCOMAnnCapCostFactors.USOACat
GROUP BY tblSYSHcpmIN.ESA, tblRPTReport.USOACategory,
tblCOMAnnCapCostFactors.OpexRate, tblCOMAnnCapCostFactors.CapitalCharge,
tblCOMAnnCapCostFactors.TotalAnnChargeFactor;