RGW ONT Commercial and Pricing Structure
The purpose of this survey is to seek your feedback on potential pricing options for our RGW ONT product, due to be launched later this year. We want to hear your thoughts on pricing level, structure and potential uptake. Please know that your responses will be treated as totally confidential and won't be shared outside of key stakeholders within Chorus.
We think it is useful to outline at a high level our rationale behind the price points presented here. We have attempted to arrive at a price where
1. We can reasonably recover our investment costs for the product development, device management platform, additional provision capabilities, and ongoing assure costs associated with this offering
2. The value you obtain from the product is greater than the cost (explicit and implicit) of purchasing, distributing and managing RGWs for your customers. For this value, we have assumed an average approx. $80 modem cost across a 4 year churn cycle, and some additional overhead for your administration and management of this channel. Based on our conversations with customers to date, we believe these assumptions are broadly correct - please let us know here if this is not the case.
In constructing the options presented here, we have taken into account a number of other considerations which we believe are important - please let us know in your feedback if we have missed the mark on any of these
1. A low monthly fee - in order to recoup value from this product, we believe it is important to keep the monthly add-on fee for use of the ONT in RGW mode as low as possible
2. Pricing consistency - providing a consistent monthly fee regardless of which generation of ONT is currently onsite, is important for standardized consumer propositions. For context - we have approximately 500,000 1st/2nd Gen ONTs installed (which would require an ONT swap to consume the RGW product) and approximately 150,000 3rd Gen ONTs (which could be remotely converted to RGW mode). All new field installs are provisioned with 3rd Gen ONTs.
3. Assure costs - we are aware that the Assure process and costs are a key consideration for you and we are working closely on this model with RSPs who have chosen to participate in our co-development. As this is still being designed, we have not presented any Assure cost assumptions here - it is our assumption that no fault found fees and diagnosis will be treated similarly to today, in that we will have a standard process and charge for agreed exceptions.
All prices and options listed here are presented without prejudice for consultation purposes only and do not constitute an offer or final confirmation.
Note that this pricing survey refers to the RGW product when applied to a standard NGA Bitstream service (i.e. not Hyperfibre). Also note that we do not refer to our "in-home services" product concept in this survey - we are running a separate test-and-learn project on this, and you can find details here.