Investor Presentaiton
LYRB
UIA TELECOMMUNICATIONS REVENUE BONDS, SERIES 2019
COST CONTAINMENT
UTOPIA/UIA has not seen any significant increases in its construction cost as its most recent deployments have moved forward.
Following an RFP process, UTOPIA/UIA entered into a two-year fixed price contract in December 2017 for main line construction and installation
components of its network with minimal cost increases.
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UTOPIA/UIA has the option to renew its contract after the initial two-year contract yearly for up to five years with renegotiated costs.
UIA has an excellent relationship with its main contractor, B. Jackson Construction and is currently reviewing their proposed increases.
UTOPIA/UIA expects to successfully renegotiate the contract with cost increases of less than 10%, which is within the anticipated range of
UTOPIA/UIA management.
Electronics costs for fiber-to-the-home are becoming increasingly commoditized, especially for Ethernet-based deployments like
UTOPIA/UIA Fiber.
Transceiver Cost Example - used in every UTOPIA/UIA Fiber installation
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100 Mbps transceiver in 2004 - ~$145
| Gbps transceiver in 2019 - $12
10 Gbps transceiver in 2019 - $36
Core-alignment fusion splicer example – tool used by installation and maintenance technician
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2004 $50,000
2018-$1,500
2019 - $1,000
Improvements in materials such as micro-cables and micro-ducts not previously available allow for lower cost of deployment.
Technology is rapidly improving in electronics. Costs have decreased and efficiency and power has improved.
Construction providers include B. Jackson Construction (main line) and TCB (Installation).
Core materials providers include Corning and Nokia.
Huawei is the preferred provider for aggregation switches, but suitable alternatives are available if needed.
PLANNED MAINTENANCE SCHEDULE
UTOPIA budgets $500,000 - $600,000 annually for replacement and upgrades to core electronics.
Expected life cycle of core electronics is 5-10 years. Replacing equipment is less expensive than upgrading current equipment.
Equipment that supported 200 gig ports 5-7 years ago now supports 600 gig ports.
UTOPIA is currently expanding capacity on the central ring from 100 gig to 400 gig.
Customer premises equipment (CPE) is replaced with service upgrades or when necessary. Average cost of CPE is about $110 per location.
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