
By Paul Noumba Um, Laurent Gille, Lucile Simon, Christophe Rudelle
The liberalization of the telecommunications markets in Sub-Saharan Africa ended in elevated pageant at the provision and pricing of verbal exchange prone. yet, a result of loss of acceptable regulatory instruments, newly confirmed regulators are poorly built to arbitrate expanding interconnection disputes among competing operators. This guidebook and its linked CD-ROM, together with the associated fee version, have been ready to supply Sub-Saharan Africa regulators and operators with a legitimate regulatory device permitting the choice of exact interconnection charges, therefore facilitating the payment of long and expensive interconnection disputes among fastened and cellular operators. the fee version belongs to the kin of 'Bottom-Up' types, which calculate interconnection fee incurred by way of an effective operator utilizing the longer term Incremental fee (LRIC) technique. The proposed expense version takes under consideration such a lot positive aspects characterizing the improvement degree of telecommunications networks in Sub-Saharan Africa (small measurement of fastened community, significance of rural telephony, over the top reliance on microwave expertise, explosive call for for cellular carrier, and vulnerable regulatory capacity). 'A version for Calculating Interconnection bills in Telecommunications' deals telecom regulators and operators not just a choice help instrument but in addition a stimulant to reinforce an figuring out of the common sense of regulating a area open to pageant.
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Extra resources for A Model for Calculating Interconnection Costs in Telecommunications
Example text
It is assumed that entry or investment decisions are made on the grounds of profits or reasonable return on investment expected from the activity. In the proposed cost model, investment costs are converted into annual economic costs, as described in appendix 1. To proceed further with the discussion, we now need to introduce the cost of capital concept. The cost of capital concept factors in technology progress, economic, and country-specific risks. The model has to determine unit interconnection costs.
In consequence, it is necessary to ensure that the common costs attributed to the increment are sound. In any case, the costs attributed should reflect the costs borne by the most efficient operators. These questions are synthesized in the two points below: • Depending on the network services or elements considered, the TELRIC method can prove to be less favorable to new entrants than the FDC method. 3 Cost Structure Specific costs Variable costs Nonspecific costs Fixed costs Increment + Pertinent joint costs Joint costs Nonpertinent joint costs + Pertinent common costs Nonpertinent common costs 20 Cost Modeling Principles must, therefore, be equal to long-run incremental costs in order to maximize economic efficiency.
Finally, it is worth outlining how the cost allocation is implemented in practice. Two options are generally considered, although either of them can also lead to an alternative: 1. Historical costs form a first option. The method therefore involves evaluating the costs on the basis of their accounting values,13 possibly adjusted to take inflation into account. 2. The forward-looking or current costs are the costs that would be incurred if the production system were rebuilt on the date of calculation.