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Old Communications costs

Below is part of a document I wrote I think in the early 90s.

I did it as part of a consulting project for a furniture manufacturer, that was publicly listed at the time, that now no longer exists. I was contracted to advise them what computer system to purchase. They asked me to determine the feasibility of connecting computer systems at 2 locations. Thomastown and Reservoir which are almost abutting suburbs in Melbourne

In looking back, im now amazed at the extremely high cost of comms then, compared with what is is now.

They never went ahead with the comms. They went against my advise as to which computer system to purchase and ended up having to employ a in-house programer. That also turned out to be a disaster for them. a few years later I sold then some packaged software that I wrote which they used quite successful. But wiht a change of CEO they started to go down hill and got bought out be a South African company. That also must have been a disaster as they now no loner exist.

Anyway here is the comms document with prices:


Data Communication Costs Between Thomastown & Reservoir

Their are a number of alternative methods of establishing data communication for xxxxxx. Basically the faster data is needed to be transferred, the more it costs. Also their tends to be a trade off between initial set up cost (one time fixed costs) and recurrent annual leasing costs. The furniture Division currently have the communication speed of data between the computer and the terminals set at 19,200 baud

The simplest communication method is to lease two normal business telephone lines and have a modem at each end. The cost of a business phone line is $274.80 per annum. The cost of a good quality 9600 baud modem is $850.00. Assuming a connection is required each business day the call charges would be 240 times $0.25 = $60.00

One time Fixed Costs $1,700.00 Annual Costs $609.60

The advantage of this method is its relative low cost. The disadvantage is that only one terminal can be utilised. To be able to use more terminals requires additional phone lines and modems.

Another alternative is to use Multiplexers. Theses devices allow multiple terminal to be connected to a single phone line with modems at either end. They come in a range of speeds and sizes. That is how fast they operate and how many “ports” they have for connecting to terminals

A Micom multiplexer from Datacraft with 4 ports is $1,452 with a $75 installation set up charge. The same device with 8 ports would be $2,009 also with $75 installation charge. As with modems a multiplexer is required at each end of the phone line

For 4 ports One time Fixed Costs $4,794.00 Annual Costs $609.60

For 8 ports One time Fixed Costs $ 5,868.00 Annual Costs $609.60

The advantage of this method is the ability to operate multiple terminals and the relative low ongoing costs. The disadvantage is the relative poor quality of standard telephone lines compared with dedicated data lines as well as the unknown factor - will Telecom in the future be charging for timed local calls.

Dedicated Data Lines are another alternative. These fall into two categories ISDN and the Digital Metropolitan Service (DMS). ISDN uses digital technology. When first introduced by Telecom it had numerous problems and still today is not as reliable as DMS. ISDN is charged one of two ways the first is a connection fee of $400 per end with an annual rental of $1,920 per annum and a timed connection charge of $0.175 for the first 2 minutes and then $0.075 per two minutes thereafter. The second method is as per the first but rather than a timed connection charge a permanent access charge of $2,200 per annum in addition to the $1,920 per annum fee. ISDN still requires Multiplexers but rather than Modems uses devices called Terminating Connectors. To take advantage of the higher speed of ISDN (64K) requires faster multiplexers. Datacraft have a 64K “Marathon” multiplexer for $2,995 for 5 ports or $4,628 for 11 ports. Both of these would have a $300 installation charge. ISDN timed costs are difficult to determine but permanent access costs would be

For 5 ports One time fixed Costs $9,090 Annual Costs $4,120

For 11 Ports One time fixed costs $12,356 Annual Costs $4,120

The advantage of this method is the high speed at which data can be transferred with a resultant fast screen response times. The disadvantage is the relative high, one time set up costs.

DMS is charged according to the speed of the data line and a one time installation fee of $750 per end (this also covers the cost of the modems) . The data speeds and relative annual costs are:

1200 Baud $2,500 9600 Buad $4,500 19200 Baud $7,000

The 1200 baud line would be far to slow. Each of the others would require different speed multiplexers

9600 baud 4 port One time fixed costs $4,554 Annual costs $4,500.

9600 baud 8 port One time fixed costs $5,668 Annual Costs $4,500

19200 buad 4 port One time fixed costs $5,750 Annual costs $7,000

19200 baud 10 port One time fixed costs $8,292 Annual Costs $7,000

The advantage of these methods are the relative lower one time set up costs. The disadvantage is the relative lower speed and higher annual costs

NOTE Baud is data communication terms basically meaning Bits per Second. 8 bits make up one Byte. One Byte is equivalent to one character.

One K is 1024 Bytes, Therefore 64K is 64 times 1024 or 65,536 characters. A 64K ISDN line can theoretically transfer 65,536 characters per second.

comms_costs_old.txt · Last modified: 2020/07/12 17:38 (external edit)