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 legitimate regulatory software permitting the selection of exact interconnection expenditures, hence facilitating the payment of long and expensive interconnection disputes among mounted and cellular operators. the fee version belongs to the kinfolk of "Bottom-Up" versions, which calculate interconnection price incurred by way of an effective operator utilizing the long term Incremental expense (LRIC) method. The proposed rate version takes into consideration so much good points characterizing the improvement level of telecommunications networks in Sub-Saharan Africa (small measurement of mounted community, value of rural telephony, over the top reliance on microwave expertise, explosive call for for cellular carrier, and vulnerable regulatory capacity).

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Based on an estimate of the volume of traffic to be handled by each network element, and the unit cost for each element, the model determines the total investment cost. To achieve this, the amount of traffic assigned to each network element at peak time is used for its sizing. Using the unit investment cost per network element, the model calculates the total investment cost per element. The operating costs are allocated to the investment unit costs to obtain a global cost per element. A unit cost per minute handled is then obtained by dividing the global total by the total 31 A Model for Calculating Interconnection Costs in Telecommunications tion from the operators and sets up procedures for the ratification of the information supplied (for example, by means of accounting audits, establishing ABC, reviewing investment invoices).

When a network does not have a transit switch, the distinction between local and single transit becomes irrelevant. For the purpose of the exercise conducted here, we will assume the hierarchy between interconnection services (intra-LS, single transit, and double transit) is established along the incumbent’s local rates zones or derived from the administrative or government territorial organization (municipalities, counties, districts, provinces, regions). The first option links the interconnection services hierarchy to the retail pricing structure of the incumbent, while the second option, although more arbitrary, does not.

The regulator should also ensure that interconnection services, which are wholesale services, are priced below corresponding retail services. As discussed earlier, the incremental cost methodology distinguishes directly attributable from nonattributable costs. It involves ascertaining, whether or not the production cost of “horizontal” service is increased, whenever a “vertical” service is added to the basket of other services produced. Considering the example of interconnection services, it is important to underscore the following three conclusions: • The provision of interconnection services does not modify the retail sales service, as the latter only concerns sales to final subscribers.

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