Download A model for calculating interconnection costs in by Paul Noumba Um, Laurent Gille, Lucile Simon, Christophe PDF

By Paul Noumba Um, Laurent Gille, Lucile Simon, Christophe Rudelle

This guidebook and its linked CD-ROM, supply Sub-Saharan Africa-regulators and operators with a valid regulatory device permitting the selection of actual interconnection expenditures, therefore facilitating the cost of long and dear interconnection disputes among fastened and cellular operators. the price version belongs to the relations of "Bottom-Up" versions, which calculate interconnection price incurred by way of a good operator utilizing the long term Incremental expense (LRIC) method. The proposed expense version takes under consideration such a lot positive aspects characterizing the improvement level of telecommunications networks in Sub-Saharan Africa (small dimension of mounted community, value of rural telephony, over the top reliance on microwave expertise, explosive call for for cellular provider, and susceptible regulatory capacity).

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This is the most probable risk that could be implied by ineffective access pricing regulation. The LRIC methodology has been criticized by several authors. Salinger (1998) and Laffont and Tirole (2001) argued that LRIC regulation provides the regulators with a key tool to manage industry entry. It is, therefore, crucial to ensure that, whenever a mistake is made, it is made in favor of overinvestment rather than underinvestment. Whenever an output is unprofitable, firms can freely dispose corresponding assets by selling them or by dispatching them to other activities.

11 Incremental costs are important in the sense that they reflect the company’s decision for producing A. Usually, in deciding to produce A, the firm expects that revenues generated by A should exceed the incremental cost incurred and provide an earning income to capital above the cost of capital. Nonetheless, incremental costs, as we have just strictly defined, are difficult to use in pricing access to a service or network element, to the extent that they only cover part of the costs. Given that A also uses other network’s resources and is partly responsible for joint costs incurred by the firm, it is necessary to allocate to A a portion of these joint costs.

ISs: international exchanges, dedicated to international transit. 2 • TSs: terminal stations in TDMA systems, used to connect about 40 subscribers. 36 User Guide The table also includes information on the stock of subscribers (connected capacity), and differentiates those connected to RCUs from those connected to LSs: • The first column contains the total number of network subscribers. • The second column contains those connected to nodes linked by satellite. • The third column contains those connected to nodes that are neither linked by satellite or SDH rings.

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