Next Generation Networks

NGN Service Costing

The deployment of NGNs will result in a new approach to cost modelling. The distinction between the access and the core network will remain with cost drivers determined by the number of connected customers in the case of the access network and the amount of traffic passed in the case of the core network. Within the core networks however there are likely to be significant changes in the long term. The use of the existing principles of cost causation whereby the use of the NGN core network is costed on the basis of the amount of data passed by each service may not be appropriate or provide sustainable long term investment.

Consideration of much of the core NGN as common cost may be more appropriate. In the medium term though, while NGN core networks are being deployed there will continue to be a requirement to cost existing and hybrid networks as the transition takes place. Until full IP call termination services are offered delivery of traffic which needs conversion from IP to circuit switched C7 signalling may attract additional costs and charges.

Costing of NGA networks will become more complex. Network operators will have copper and fibre hybrid networks in place for many years to come. Modelling decisions will therefore have to be taken based on number of customers passed or connected to each technology, geographical location which may lead to geographical de-averaging of wholesale charges, risk premium for new fibre investment.

InterConnect has considerable experience in developing cost models for telecommunications networks, which together with our technical, regulatory and commercial skills enable us to assist Regulators and operators to understand the costs of services and develop appropriate strategies for setting wholesale charges in an NGN environment.