A Model for Calculating Interconnection Costs in Telecommunications
Paul Noumba Um
World Bank, 2004 - Business & Economics - 67 pages
The liberalization of the telecommunications markets in Sub-Saharan Africa led to increased competition on the provision and pricing of communication services. But, due to the lack of appropriate regulatory tools, newly established regulators are poorly equipped to arbitrate increasing interconnection disputes between competing operators. This guidebook and its associated CD-ROM, including the cost model, were prepared to provide Sub-Saharan Africa regulators and operators with a sound regulatory tool allowing the determination of accurate interconnection costs, thus facilitating the settlement of lengthy and costly interconnection disputes between fixed and mobile operators. The cost model belongs to the family of 'Bottom-Up' models, which calculate interconnection cost incurred by an efficient operator using the Long Run Incremental Cost (LRIC) methodology. The proposed cost model takes into account most features characterizing the development stage of telecommunications networks in Sub-Saharan Africa (small size of fixed network, importance of rural telephony, excessive reliance on microwave technology, explosive demand for mobile service, and weak regulatory capacity). 'A Model for Calculating Interconnection Costs in Telecommunications' offers telecom regulators and operators not only a decision support tool but also a stimulant to enhance an understanding of the logic of regulating a sector open to competition.
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access network adjusted annuity assumptions attributable costs average number Burkina Faso cables Cameroon capacity column common costs competition connected core network cost allocation cost per minute costs incurred Cote d'lvoire default values double transit economic efficient operator entrants equipment Erlangs European Commission euros firm fixed costs fixed-line historical costs implemented includes incremental costs incumbent infrastructure input interconnection costs interconnection rates interconnection services investment costs joint and common leased lines LRIC methodology LS-LS marginal cost masts Mbit/s Mbps ments microwave mobile networks model calculates network elements number of calls number of nodes number of physical number of rings operating costs peak hour percent percentage physical routes production regulator regulatory remote concentrator routing factors SDH rings shared specific STM4 TDMA systems telecommunications terminal station termination tion topology total cost total number transit switch transmission links trenches unit cost WACC World Bank Institute