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Quality of Service in Cost Models



    (Pompeu Fabra University)


Several network operators have been deploying Quality of Service (QoS) techniques that help improve customer satisfaction and can have an impact on the cost of telecommunications services. As Long-Run Incremental Cost (LRIC) models are used in various jurisdictions to derive the cost of regulated services, a question that needs to be addressed is how QoS concepts can be included in an LRIC model. This article pursues two goals. First, it describes the main QoS techniques and strategies that could be taken into account in a cost model. Second, it discusses the impact of QoS concepts on an LRIC model. The article shows that the introduction of QoS concepts into a cost model involves a critical review of the following parameters: cost drivers, cost of network elements, traffic supported by network elements, and usage factors.

Suggested Citation

  • Juan RENDON SCHNEIR, 2012. "Quality of Service in Cost Models," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(87), pages 135-153, 3rd quart.
  • Handle: RePEc:idt:journl:cs8707

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    References listed on IDEAS

    1. Friedman, Eric & Moulin, Herve, 1999. "Three Methods to Share Joint Costs or Surplus," Journal of Economic Theory, Elsevier, vol. 87(2), pages 275-312, August.
    2. Günter Knieps, 2011. "Network neutrality and the evolution of the internet," International Journal of Management and Network Economics, Inderscience Enterprises Ltd, vol. 2(1), pages 24-38.
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    More about this item


    QoS; cost model; LRIC; NGN.;

    JEL classification:

    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation


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