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Modelling the impact of Next Generation Access (NGA) on voice termination cost

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  • Jay, Stephan
  • Plueckebaum, Thomas
  • Ilic, Dragan

Abstract

Termination of a telephone call can only be realized by the network operator of the receiving party. For this reason, the markets for fixed and mobile call termination are regulated ex-ante including price control. To determine the costs of call termination the current regulatory regime considers only those parts of the network where customers compete for jointly used resources (mainly bandwidth). Therefore, the critical border is the "demarcation point" between the end customer dedicated access network and the aggregation network where customers compete for bandwidth. In addition to the extent of the overall network cost to be considered (depending on the location of the demarcation point) the traffic share of the voice termination service (which determines how much of the relevant cost is borne by voice termination) compared to all the other services sharing the same NGN/ NGA network needs to be taken into account. We analyse the cost effects with a cost model, which considers the part of the access network from the MPoP to the demarcation point, where the dedicated (access) network begins, in detail. This allows us to compare the impact of different demarcation points and service scenarios on the level of voice termination rates for three NGA architectures (FTTH/P2P, FTTH/PON and FTTC). We considered double and triple play service packages and ran sensitivities on data usage. In addition, we calculated termination cost for three different demarcation point locations in the case of FTTH/PON.

Suggested Citation

  • Jay, Stephan & Plueckebaum, Thomas & Ilic, Dragan, 2010. "Modelling the impact of Next Generation Access (NGA) on voice termination cost," 21st European Regional ITS Conference, Copenhagen 2010: Telecommunications at new crossroads - Changing value configurations, user roles, and regulation 17, International Telecommunications Society (ITS).
  • Handle: RePEc:zbw:itse10:17
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    More about this item

    Keywords

    Voice Termination; Next Generation Access; FTTH; price regulation; termination monopoly; cost modelling;

    JEL classification:

    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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