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City of Prince George fibre
Network and Technology
Centre Business Case
City Council Presentation
Enzo D’Agostini, P. Eng.
Date: April 18, 2011
i CITYOF
PRINCE GEORGE
Stantec
Presentation Objectives
• Project Work Scope and Objectives – Phase I
• Business Case Development and Approach
• Summary of the Findings and Conclusions
• Summary of Risks and Recommendations
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~Stantec
Project Work Discription
Project Objective:
Project was intended to surface a detailed business case for a municipally owned fibre
network and provide an opinion on the Technology centre component.
Project Scope:
• Review of existing fibre Network business plan (2008)
• Refinement and update of key assumptions used in existing fibre business plan
(Capital Estimates, Operating Costs and Revenues)
• Provide High level opinion on need for Technology Centre
• Development of a business case surfacing the most viable option (level of financial
detail to be similar to existing fibre network business plan).
• High level Implementation strategy
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Summary of the Findings and Conclusions
Business Case – Financial model:
• A financial model was developed to provide a 10 year outlook on the potential cash flow
position for the City. The model was based on many assumptions and has an estimated
accuracy level of +/- 25%
• Key assumptions considered in the model include the following:
• Business demographics for the City of Prince George
• Network Expansion and build based on targeted areas for optimum
network coverage
• Timing and prioritization of the deployment and associated
expenditures to maximize customer penetration but also manage capital
outlay
• Customer circuit penetration projections
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Summary of the Findings and Conclusions
Network Expansion and Build out:
• Downtown Core (Phase I)
ClfY OF PRINCE GEORGE
ntec
Summary of the Findings and Conclusions
Network Expansion and Build out:
• Carter Light Industrial (Phase II)
ClfY OF -----------------PRINCEGEORGE
Stantec
~Stantec
Summary of the Findings and Conclusions
Network Expansion and Build out:
• Boundary Road Industrial (Phase III)
Stantec
Phase Ill
ClfY OF PRINCE GEORGE
Summary of the Findings and Conclusions
Stantec
Phase Ill
I
ClfY OF PRINCE GEORGE
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Summary of the Findings and Conclusions
Business Case – Financial
Model – 10 yr view:
• Cumulative Cash Flow
• Positive Net Income - Phase I and II
• Positive NET Cash Flow – Phase II
• Negative NET Cash Flow – Phase I
and Phase III
• Negative NET Cash Flow - TOTAL
Stantec MUNICIPAL FIBRE NETWORK & DATA CENTRE
INCOME AND CASH FLOW STATEM ENTS
Yea r 10
(Nom inal Dollars)
INCOM E STATEM ENT OPERATING REVENUES:
Dark f ib re renta 1
Custa mer d rop fees
Tot al revenues.
OPERATING EXPENSES:
Emergency maintenance standby fees
custo mer drop expense
Tot al ope rating e ,cpense
INTER-COMPANY (with City}:
Dark fibre rental to city Labor allocat ions f rom City
M ana,:eriaJ
Marketing Support Admin support Ne t\'t'o rl administrat ion
Mainte nance a 11d repairs Maintena nce su pplies
o ccupancy costs fi e m City
NETWORK USAGE FEE payabJe t o c~ 0 'ierhead a llocation from Cit y
Net in ter-<omp.a ny e,cp.ense
EBITDA
Amortizat ion
Interest on interim fi nancing de bt Interest en Ie ng te rm debt
NET rNCOM<IILOSSl
CASH FLOW STATEM ENT OPERATING ACTIVITIES :
Net income
Add : Amortization
cash ft o)fro m operations
INVESTING ACTIVITIES: capital expe ndrt:u r.es. • network e x.t ension
Capital expe nd'itur.es. · build ing connecttons ca pital expe nditu res.• capita l renewal
Cash tto)fro m investin~
RNANCING ACTMTIES: Custo mer financing (building connect ions) Interim fmancing debt issued (rep.a id )
Len g term finaocing iss ued
Lon g te rm financing ( repaid )
Cash ftottrom financinl:
Opening~h
Closinl!':C~h
NET CASH INFLOW/(OUTFLOW)
TOTAL
!i.600,000
$442,800
$1 042,800
$ 32,000
$ 38>,16 6
!i-417 ,166
so
$117 ,000
$40,000
so $72,0 00
$ 50,000
$10,000
so $ 10,428
$ 39,060
$338 ,488
$101 ,16 1
so $140,500
$45 485
$45,485
$101 ,161
$146,646
so ($113,950)
($49,961)
1$163 911)
$113,9 50
so so
($234,04'1)
($120,098 )
($627,597 )
1$764 959)
($137,3631
~
DOW NTOWN
OOR.E
$2.94,000
$19 1,880
$485 880
$32,000
$ 166, 90 >
$ 198, 90>
$0
!:, 57, 330
$19,600
$0
$35,2 8 0
$24,500
$4,900
$0
$4,859
$19,1.39
$165,608
$40,149
$0
$57,500
$23 71.8
$2 3,718
$40, 149
$63,8 67
$0
($33,028) (S19,B68J
1$52,896)
$33,02.8
$0
$0
($95,785)
($62,757)
($140,548)
($192 ,3'4)
($51,786)
£llAll.l,
CARTER LIGHT
l.N DUSTRI.AL
$19 2,000
$157,440
$ 349,440
so $136,94 8
$136,94 8
so
$ 3 7,440
$12,800
so $2 3,040
$16,000
$3,.200
so $3,494
$12,499
$108,474
$29 ,3 67
so $22 ,500
$52152
$52.,152
$2.9 ,3-67
$81,519
so (SS7,126I ($14,4771
IS71 6031
$57,12.6
so so
($37,4811
$1.9 ,645
$44,229
$73,789
$29,561
ClfY OF PRINCE GEORGE
~
BOUNDARY ROAD
5114,000
$93,480
5207,480
,o $81,}13
$81 , 313
so
$2.2,2 30
$7,600
so $13,6 80
$9,500
$1,900
,o $2,075
$7,42 1
$ 64,406
$ 31,6 45
so $ 60,500
1$30 384)
($30,384)
$31,6 45
Sl ,261
so (S23,796)
(S15,616J
(S39 412)
$2.3,796 ,o ,o
($100,7821
($76,986)
($531,2771
1$646 4141
[$115,1371
~Stantec
Summary of the Findings and Conclusions
Business Case – Financial Model beyond 10 yrs:
• Beyond 10 yrs
• Positive Net Income - Phase I and II
• Positive NET Cash Flow – Phase II
• Negative NET Cash Flow – Phase I and Phase III
• Negative NET Cash Flow - TOTAL
Stantec
$3,.00 0,.0 00 ,---------------.===================-----
CUMULATIVE CASH FLOW {CONSOLIDAliED)
$2,000,.0 00 +---------~ -----------------~------
Short lierm
1 2 3 4 YEARS
Lo11g lierm Financing
38 yrs
-$3,000,.000 +--------------------------------
-$4,000,.0 00 ~-------------------------------
- Capital Inv est ment Requ ir ed
ClfY OF PRINCE GEORGE
- Cumu la,t iv e Cash Flow (BASE CASE)
- c umu lat iv e Cash Flow (Rev enue @-10'%)
- Cumu lat iv e Cash Flow (Rev enue @ -20'%)
~Stantec
Summary of Key Project Risks
• Financial (viability)
• Revenue Assumptions ( Customer connections, take rate, network capture, service offering,
pricing, installation costs )
• Operational Assumptions ( Manpower to operate, network administration, debt financing, service
levels, Inflationary impacts )
• Business Demographics ( number of large businesses, propensity to buy )
• Construction Costs ( Labour costs, boring/drilling vs trenching/plowing, restoration)
• Political (backlash)
• Competitive landscape impact (Telus, Shaw, other providers )
• Access to network ( those not captured by the network)
• Long term payback using public funds ( should public funds be used for this type of opportunity)
• Need for an appropriate governance model and stakeholder communication plan
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~Stantec
Summary of Recommendations
Technology Centre
• Not justifiable on the basis of a fibre termination and customer co-location alone.
• Should be multiple co-location and fibre termination sites to reduce fibre counts in the backbone and
also maintain a high reliability network.
• Considering the size of the Prince George market, the need for future expansion of the existing City IT
infrastructure, the requirement for multiple fibre termination points in order to properly support the
Municipal fibre network as well as future opportunities and possibilities to improve City operations
• Opportunities - Co-location space for the fibre network customers,
- Backbone redundancy for the fibre network
- City IT department , current and future expansion
- Local business continuity coverage,
- Winter games data (digital Audio and Video) support
- Longer term City Operations improvements.
- Third party gateway or business critical data back-up facilities.
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~Stantec
Summary of Recommendations
Fibre Network • Network Topology - Star configured network architecture is recommended, with longer term redundancy
in the backbone
• Network Ownership and Operation - “City Owns and Operates”
• Services to be Offered - “ Dark Fibre”
• Construction Strategy - Spread capital cost of construction across 6 years.
- Prioritize construction by Phases. Phase I carrying the highest priority, phase II
and a portion of Phase III to be a secondary priority and remaining sections of
Phase III to carry third priority.
• City should adopt the risk mitigation strategies identified in the report in section 9
• Resellers and key customers should be part of strategic decision making for scaling out the network.
• Effective communication plan required to educate and raise awareness for all stakeholders
• Refinement of business model recommended before final “go-no-go” decision is made
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~Stantec
City of Prince George fibre
Network and Technology
Centre Business Case
APPENDICES
i CITYOF
PRINCE GEORGE
Stantec
PHASE I - Project Roadmap
GATE 1 GATE 2
Scoping study
Prelim Business
Case
Prelim Execution/
Business Plan
Prelim Work
Breakdown
(WBS)
Prelim
Design/Eng
Specifications
Updated
Business Case
Updated
Execution/
Business Plan
Prelim WBS
Class V+50% to -30%
Class IV+35% to -20%
Final Design/
Specifications
Final Business
Case
Final
Execution/
Business Plan
Final WBS
Class III+20% to -15%
Procurement
C&SU
Plan
Red line
drawings
Monitoring and
Control
Class II+10% to -7%
Performance
evaluation
Idea Generation
GATE 3 GATE 4 GATE 5 GATE 6
Lessons learned
Close-out
report
Financial
Close-out
Planning / Design Implementation Evaluation
Increasing Scope Definition
Idea
validation
Preliminary
Design/
Engineering
Final
Design/
Engineering
Project
Implementation
Commission
and
Start-up
Project
Evaluation and
Close-out
“Conceptual” “Pre-Feasibility” “Feasibility” “Control Target”
“Final
Go/No Go”
CURRENT
STATUS
END
PHASE
1
END
PHASE
2
~------------, r----------- r-----------1 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I -------------~ -----------~ -----------~
-----------~ -----------~ I I I I I I I I I I I I I I I I I I I I I I I I I I I I : I : I ~----------~ ~----------~
i
--------------.. I I I I
I I I I I
I : L.------------..
~Stantec
Capital Cost Accuracy & Decision Making
Order ofMagnitude Estimate
CLASS VCLASS BCONCEPTUAL
PreliminaryEstimate
CLASS IVCLASS CFACTOREDPRE-FEASIBILITY
BudgetEstimate
CLASS IIICLASS B (QUALIFIED)A,F,E, CONTROLFEASIBILITY
DefinitiveEstimate
Note:This diagram shall not be used to define the order accuracy of an estimate
CLASS IICLASS BCONTROLTARGET COST
ALTERNATETITLES
Maximum Probable Cost
Most Probable Cost
Basis of Estimate
Preliminary Project Scope DefinitionOutline of Process DesignPreliminary SchedulePreliminary Site Data
Basis of Estimate
More defined Project Scope DefinitionSite SelectedOutput SpecifiedType of Structures Defined
Basis of Estimate
Defined Project ScopeApproved Process Flow DiagramsList of EquipmentPreliminary Plot & Site PlansProposed Project SchedulePreliminary Logistics Plan
Basis of Estimate
Defined Project ScopeApproved Piping & Instrument Diagrams Plot & Site PlansApproved Engineering SpecificationsEquipment Purchased or QuotedApproved Master Project ScheduleSite & Labour Survey CompleteBulk Take-offs CompleteLogistics Plan Approved
% O
ve
rru
n
+10
-40
+20
-30
+30
-20
+40
-10
+50
0
% U
nd
err
un
50
35
20
20
35
10
715
Minimum Probable Cost
MechanicalCompletion
FinancialCompletion
Project Completion
CLIENT
Client/Project
Figure No.
Title
PROJECT LINE 1PROJECT LINE 2
Classes of Estimate Diagram
1.0
i -- S1tarrtE~-----------------------------------------~ ClfY OF Stantec PRINCE GEORGE
........ ........ .... _ ----
---------------
__ [ -------------r ---- -----------------------
--~------------- -----------------------
D t 2001 11 11 10 00
~ Stantec
Summary of the Findings and Conclusions
Option Evaluation Matrix:
• An option matrix was developed to surface the most viable option
• City objectives formed the key evaluation criteria
• The Key criteria which reflect pertinent and relevant rewards or risks to the
City were added to form five key criteria components, these included:
• Economic
• Environmental
• Social
• Operational
• Legal, Political and Regulatory
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~Stantec
Summary of the Findings and Conclusions
Option Evaluation Matrix:
• The consolidated results for the fibre Network component – Ownership/Operations
Options considering all the criteria:
ClfY OF --------------------------------------------- PRINCE GEORGE
Stantec
120.0%
100.0% VI
al ::, QJ
...J
~ 80.0%
Cl a:
~ 60.0% LIJ a: "C C 40.0% Ill ~ <l'I
ci:: 20.0%
0.0%
FIBER NETWORK-OWNERSHIP/OPERATOR OPTIONS
(ALL CRITERIA)
Status Quo City Owns &
Operates
City Owns & Othe rs Own & Othe rs Own &
Othe rs Operat e City Ope rat es Operat e
MAX Li ne
• REWARD
• RI SK
MIN Li ne
~Stantec
Summary of the Findings and Conclusions
Option Evaluation Matrix:
• The consolidated results for the fibre Network component – Services Model Options
considering all the criteria:
ClfY OF --------------------------------------------- PRINCE GEORGE
Stantec
100.0%
90.0%
"' "ijj 80.0%
:> QJ 70.0% ...J
~ C 60.0% a::
~ 50.0% uJ a:: 40.0% "C C cu 30.0% ~ <l'I
12 20.0%
10.0%
0.0%
FIBER NETWORK -SERVICES MODEL OPTIONS
(ALL CRITERIA)
DARK FIBRE MANAGED SERVICES
MAX Li ne
• REWARDS
• RISK
M IN Li ne
~Stantec
Summary of the Findings and Conclusions
Option Evaluation Matrix:
• The consolidated results for the Technology Centre component – Ownership/Operations
Options considering all the criteria:
ClfY OF --------------------------------------------- PRINCE GEORGE
Stantec
120.0%
100.0% "' ai :> Q)
-' 80.0% ~ C a:: ~ 60.0% LU a:: "C C: 40.0% n, ~ VI
ii:: 20.0%
0.0%
TECHNOLOGY CENTRE - OWNERSHIP/OPERATOR OPTIONS {ALL CRITERIA}
City Owns & Operates City Owns & Oth e rs Op e rate Oth e rs Own & Ope rate
MAX Li ne
• REWARDS
• RISK
M IN Li ne
~Stantec
Summary of the Findings and Conclusions
Business Demographics:
Stantec
90.0%
80.0%
70.0%
-; ... ~
60.0%
~ 50.0%
~ iii
40.0% "' "' ., C
·.;; 30.0% :, ca
20.0%
10.0%
0.0%
City of Prince George - Business Demographics
Business Size Demographic 8 4.1%
• Business Size
3.1% 0.8%
1-19 Em ployees 20-49 Employees 50-199 Employees >200 Employees
Data Sou rce: Busin ess Registe r, St atictics Canada. In some areas, boundarychanges/ geocod ingchanges may cause large changes
PrlMit Geo CA 1 to 19 20 lo A9 SO. 199
ClfY OF PRINCE GEORGE
~Stantec
Summary of the Findings and Conclusions
Timing and Prioritization of the Deployment and associated
Expenditures :
Stantec
C Al FUNDING ESTIMATE · City of PG Fibre Network YEAR YEAR YEM '\R
PHASE I - Downtown Core Network Extension, $583,159 $583,159 so so
Existing City Duct S12,905 so so so Customer Building Connections S55,046 $88,074 S77,065 sn,02s
PHASE 11 - carter Ueht lndustri I
Network Extensions so S142,816 S190,421 S190,421
Existing City Duct so $13,773 so so Custome.r Building Connections $57,126 $95,210 $95,210 S57,126
PHASE Ill • Boundary Road Industrial CitYWid Tra port
Network Extensions S37,598 S287,217 S376,095 S327,194
Existing City Duct so $44,500 $44,500 $44,500 Customer Building Connections so S23,796 $47,592 S23,796
ANNUAL NEW CAPITAL REQUIRED:
CUMUIATM CAPITAL REQUIRED: 45 8 24 i80 $2 855 531
YEA 5 YEAk
so so so so so so
sn.02s $33,028 S33,028
S38,560 so so so so so
S57,126 $57,126 S57,126
S232.011 S15,348 so S31,818 so so S23,796 S23,796 S23,796
947, 76964 $4 190,
YEA
so so
$33,028
so so
S57,126
so so
S23,796
04
ClfY OF PRINCE GEORGE
9 YEAR
so so so so
S33,028 $33,028
so so so so
S57,126 S57,U6
so so so so
S23,796 S23,796
18 5H 764
~Stantec
Summary of the Findings and Conclusions
Customer Circuit Penetration projections :
•Phase I
Stantec
Customer Connect ion Assumptions: I 1 "Pri mary" customer con nections are based on direct subscri be rship to the network 2 · secondary" customer co nnections a.re based on co nnections through a Rese ll er 3 A "Secondary Subscri ber" co nnection Rati o of 1:10 will be used to estab lis h add itional dark fi bre requirem ents for th e rese ll ers . 4 Th e database for "P rim ary" custom er co nnecti ons will be derived from all businesses who have > 50 em ployees . 5 Th e database for · secondary" customers will be derived fro m all businesses who have < 50 em ployees . 6 "Primary" and · secondary" custom er co nnecti on penetrati on rates and number of business quantiti es for each area are included be low. 7 Th e three target areas of th e Downtown Core, Ca rter Light Industri al and Boundary Road Industrial m ake up approximately 60% of total businesses in Prince George
DOWNTOWN CORE (PHASE I) - CUSTOMER Assumption W ork Sheet
Total Business Custom er Base : 3,297 60% ofTotal Base : 1,979
% with >50 Em ployess : 4 .1 % % with <50 Em ployees : 95.9%
DOWNTOWN CORE (PHASE 1) - (Po rti on of 50%): 50.0% "PRIMARY Custom er" PENETRATI ON Rate (30% after 3 yrs): 10.0%
"SECONDARY Custom er" PENETRATI ON Rate (9% after 3 yrs): 3.0% "PRIMARY Custom er" PENETRATI ON Rate (5%/YR beyond 3 yrs): 5.0%
"SECONDARY Custom er" PENETRATION Rate (1 %/YR beyond 3 yrs): 1.0% SECONDARY Rese ller to Custom er Connecti on Rati o: 10.0%
Customer Projections YR1 YR2 YR3 YR4
Annual Business Growth Rate: 1.0% 1.0% 1.0% 1.0% 1 0% 1.0% 1.0%
Total Potential Downtown Core (Phase I) Customer Base : 999 986 96 1 937 93 4 932 929
Total Potent ial PRIMARY Customer Base : 41 41 40 39 38 38 38
Total Potent ial SECONDARY Customer Base : 959 947 923 899 897 894 892
" PRIMARY "Customer PEIJETRATlotJ Rate: 10.0% 100% 100% 5.0% 50% 5.0% 5.0%
" SECONDARY" Customer PE tJETRATION Rate: 30% 30% 3.0% 1.0% 1 0% 1.0% 1.0%
Primary Customer Connections(Derate by 50% in YR1 ): 3 5 4 2 2 2 2
Secondary Customer Connections (Derate by 50% in Yr1 ): 2 3 3 1 1 1 1
Total Customer Connections: 5 8 7 3 3 3 3
CUMULATIVE Customer Connections: 5 13 20 23 26 29 32
PENETRATION RATE of Total Business Base: 2.31/. 3.51/. 3.51/. 1.31/. 1.31/. 1.31/. 1.3½
2.3X 5 .9 X 9 .6X 11.lx 12.4X 13.7X 15.lX
3, 297 1
ClfY OF PRINCE GEORGE
Total Bu sinesses in PG Market (100%)
999
Captu red by Network in Pha.se
959 96% (of 60%) <50 Emp loyees
4 1
4% (of 60%) >50 Employees
YRS YR9 YR10
1 0% 1.0% 1.0%
926 923 921
38 38 38
889 886 884
50% 5.0% 50%
1 0% 1.0% 1 0%
2 2 2
1 1 1
3 3 3
35 38 41
1.31/. 1.31/. 1.31/.
16.4X 17.8X 19.1%
~Stantec
Summary of the Findings and Conclusions
Customer Circuit Penetration projections :
•Phase II
Stantec
Customer Connection Assumptions: I 1 "Prim ary" customer co nnections are based on direct subscri be rship to th e network 2 · secondary" customer co nnections are based on co nnections through a Res ell er 3 A · secondary Subscri be r" co nnection Ratio of 1:10 will be used to establi sh add iti onal dark fibre requirements for the rese ll ers. 4 The database for "Primary" customer connecti ons will be derived from all businesses who have > 50 empl oyees. 5 The database for · secondary" customers will be derived from all businesses who have < 50 employees. 6 "Prim ary" and · secondary" customer co nnection penetrati on rates and number of business quantities for each area are included below. 7 The three target areas of th e Downtown Core, Carter Light Industri al and Boundary Road Industrial make up approximately 60% of total businesses in Prin ce George
CARTER LIGHT INDUSTRIAL (PHASE II) - CUSTOMER Assumption W ork Sheet
Total Business Customer Base: 3,297 60% ofTotal Base: 1,979
% with >50 Employess: 4.1% % with <50 Employee s: 95.9%
DOWNTOWN CORE (PHASE 1) - [Porti on of 50%): 30.0% "PRIMARY Customer" PENETRATI ON Rate [30% after 3 yrs): 10.0%
"SECONDARY Customer" PENETRATION Rate [9% after 3 yrs): 3.0% "PRIMARY Customer" PENETRATION Rate (5%/YR beyond 3 yrs): 5.0%
"SECONDARY Customer" PENETRATION Rate (1 %/YR beyond 3 yrs): 1.0% SECONDARY Resell er to Customer Connection Rati o: 10.0%
Customer Projections YR1 YR2 YR3 YR4
Annual Business Grow th Rate: 1.0% 1 0% 1.0% 1 0% 1.0% 1.0% 1.0% Total Potential Coll ege Dist rict (Phase II ) Customer Base : 600 594 577 559 553 546 540
Total Potent ial PRIMARY Customer Base : 25 25 24 23 23 23 22
Total Potential SECONDARY Customer Base: 576 570 554 537 53 1 525 518
"PRIMARY "Customer PEtiETRATION Rate: 10.0% 10.0% 10.0% 5.0% 5.0% 5.0% 5.0% "SECONDARY" Customer PE tffTRATION Rate: 3.0% 30% 3.0% 1 0% 1.0% 1.0% 1.0%
Primary Customer Connections(Derate by 50% in YR1 ): 2 3 3 2 2 2 2 Secondary Customer Connections (Derate by 50% in Yr1 ): 1 2 2 1 1 1 1
Total Customer Connections: 3 5 5 3 3 3 3
CUMULATIVE Customer Connections: 3 8 13 16 19 22 25
PENETRATION RATE of Total Business Base: 2.0½ 3.SX 4.0X 2.11/. 2.2½ 2.21/. 2.21/.
2.0X 5 .9X 10.1X 12.5X 14.8X 17.2X 19.SX
3,297 1
ClfY OF PRINCE GEORGE
Tot al Bu,inesse, in PG M ar ket (100%)
600 Captured by Network in Phase
575 96% (of 60%) <50 Emp loyee,
24 4% (of 60%) >50 Emp loyee,
YR8 YR9 YR10
1.0% 1 0% 1 0%
533 527 520
22 22 22
512 506 499
5.0% 5.0% 5.0%
1.0% 1 0% 1 0%
2 2 2
1 1 1
3 3 3
28 31 34
2.3:X 2.31/. 2.31/.
22.1X 24.7X 27 .3%
~Stantec
Summary of the Findings and Conclusions
Customer Circuit Penetration projections :
•Phase III
Stantec
Customer Connection Assumpt ions: I 1 "Primary" customer co nnections are based on direct subscri bership to the network 2 · secondary" customer co nnections are based on connecti ons through a Resell er 3 A · secondary Subscri ber" connection Ratio of 1:10 will be used to estab lish additional dark fi bre requirements for th e resell ers. 4 The database for "Prim ary" customer co nnections will be derived from all businesses who have > 50 employees . 5 Th e database for · secondary" customers wi ll be de rived fro m all businesses who have < 50 employees. 6 "Primary" and · secondary" customer connection penetration rates and number of business quantities for each area are included below. 7 The three target areas of th e Downtown Core , Carter light Industri al and Boundary Road Industri al make up approxim ately 60% of total businesses in Prin ce George
BOUNDARY ROAD INDUSTRIAL (PHASE Ill) - CUSTOMER Assumption W ork Sheet
Total Business Customer Base : 3,297 60% ofTotal Base: 1,979
% with >50 Employess: 4.1% % with <50 Employees : 95.9%
BOUNDARY ROAD INDUSTRIAL (PHASE Ill ) - (Po rti on of 70%): 20.0% "PRIMARY Customer" PENETRATION Rate (30% after 3 yrs): 10.0%
"SECONDARY Customer" PENETRATION Rate (9% after 3 yrs): 3.0% "PRIMARY Customer" PENETRATION Rate (5%NR beyond 3 yrs): 5.0%
"SECONDARY Customer" PENETRATION Rate (1%NR beyond 3 yrs): 1.0% SECONDARY Resell er to Customer Connection Ratio: 10.0%
Customer Projections YR1 YR2 YR3 YR4
Annual Business Growth Rate: 1.0% 1 0% 1 0% 1 0% 1 0% 1.0% 1.0%
Total Potential Bounda~ Rd Industri al (Phase Ill ) Customer Base: 400 404 397 379 372 364 357
Total Potential PRIMARY Customer Base : 17 17 17 16 16 15 15
Total Potential SECotJDARY Customer Base: 384 388 381 364 357 350 343
" PRIMARY "Customer PEIJ ETRATlotl Rate: 10.0% 100% 10.0% 50% 50% 50% 5.0%
" SECONDARY" Customer PENETRATION Rate: 30% 3.0% 30% 1.0% 1.0% 1.0% 10%
Pri ma~ Customer Connections(Dera te by 50% in YR2,100% in YR1): 0 1 2 1 1 1 1
Seconda~ Customer Connections (Derate by 50% in Yr2.,100% in YR1): 0 1 2 1 1 1 1
Total Customer Connections: 0 2 4 2 2 2 2
CUMULATIVE Customer Connections: 0 2 6 8 10 12 14
PENETRATION RATE of Total Business Base: 0.01/. 2.71/. 5.51/. 2.91/. 3.01/. 3.01/. 3.11/.
o_ox 2 .7¾ 8.3¾ 11.6¾ 14.8¾ 18.1¾ 21.6¾
3,297 1
ClfY OF PRINCE GEORGE
Total Businesses in PG M arket (100%)
400
Captured by Network in Phase
384
96%(of 60%) <50 Emp loyees
16
4% (of 60%) >50 Emp loyees
YRS YR9 YR1 0
1.0% 1 0% 1 0%
349 342 334
15 14 14
336 329 321
5 0% 50% 50%
1 0% 1.0% 1.0%
1 1 1
1 1 1
2 2 2
16 18 20
3.11/. 3.21/. 3.31/.
25.2¾ 28.9¾ 32.9%
~Stantec