Uppfoljning riktlinjer - MRP by niusheng11


									                                                                                                                                                                                                                                 Access model
                                                                                                                                                                                                                    Core model
                                                                                                                                                                                                       Colo model
MRP #    MRP text                                                   Text summary                                  How MRP is met in BU model
CG 1     The models should be based on forward-looking long run     FL LRIC no migration                          Use current prices, use annualisation formulae reflecting economic costs (a
         incremental costs.                                                                                       choice of formulae is included), assume all costs fed into model are variable in
         No migration costs should be included.                                                                   long run (except a few that are for "special" expensed-services). No migration                                                P
                                                                                                                  costs are input - as the change-over is not modelled.

CG 2     For the core network, the increment should include all     All services                                  Input to the dimensioning of the Access and Core network dimension drivers
         services using the core network. For the access network,                                                 are: the volumes of traffic from all services. In core, non-PTSN services have a
         the increment should include all services using the access                                               total transmission Mbit/s input to dimension the total demand. The Mbit/s
         network. The LRIC of co-location is the cost incurred in                                                 demand may vary by transmission layer - a profile of the demand can be defined
         providing co-location services These definitions should                                                  so that a percentage of the traffic is assumed to be "regional" or "national."                    PP
         include the services provided by the SMP operator’s                                                      Retail PSTN products are included in the call routing table to ensure the core
         network division to its own retail division as well as the                                               telephony network is fully dimensioned. Access networks have other services
         services provided to other operators.                                                                    as an input demand driver.
CG 3     The line card (located in the concentrator) should be     Line card is demarcation of core and access First (lowest) line card in the existing node is the demarcation, even if the node
         included in the access network, whereas other exchange                                                changes to another types of equipment. Existing RSMs are nodes, as are new
         related costs should be included in the core network,                                                 RSMs.
         except where costs are common between the two                                                                                                                                                              PP
         networks. The line card should be excluded from the costs
         of unbundled local loops.

CG 4     The models should allow recovery of common costs.          Recovery of common costs allowed              Common costs that are network element related will generally be marked up
         These costs should be shown separately.                                                                  using an equal mark-up technique. The common costs will be included as a
                                                                                                                  percentage increase in the cost of the element - the percentage is calculated by
                                                                                                                  a calculation of the total common costs divided by the total usage of it by all
                                                                                                                  elements (wholesale and retail). Common business costs are allocated at the
                                                                                                                  end of the model in Consolidation using a mark-up. Equal mark-ups are used. It
                                                                                                                  is simple for a user to adjust the model to have other mark-up techniques, but as
                                                                                                                  there are a large number of potential options, this has not been incorporated into
                                                                                                                  the model.                                                                           P                                        P
                                                                                                                  Common costs for (say) shared trench and duct have a cost-sharing percentage.
                                                                                                                  Thus the cost may be shared equally or biased to core or access or to the other
                                                                                                                  utility sharing the digging.
                                                                                                                  A number of equipment items have fixed costs, that are common to a number of
                                                                                                                  services that use the equipment. Often the fixed cost is included within the
                                                                                                                  overall cost of the item and hence the cost is recovered in the same way as the
                                                                                                                  variable cost. This is in effect an equal mark-up technique.

CG 5     The models should identify the costs that are common       Common costs other than core and access       Any costs that relate to other than core or access are identified within the model
         between the other increments and the core and access                                                     and "dumped" as the costs are not relevant. Comments in the model tables
         networks.                                                                                                show where these costs are extracted. The user may analyse these costs, if
                                                                                                                  they are of interest. Since the costs are not relevant to the model outputs, they                 PPP
                                                                                                                  are not exported to the consolidation model.

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                                                                                                                                                                                                                                         Access model
                                                                                                                                                                                                                            Core model
                                                                                                                                                                                                               Colo model
MRP #    MRP text                                                     Text summary                                  How MRP is met in BU model
CG 6     As far as possible, common costs should be allocated to      Use appropriate cost drivers for common       Use a mark-up technique as described for CG 4.
         increments and services using appropriate (direct or         cost or equal mark ups
         indirect) cost drivers. Only common costs, for which it is
         not possible to identify the extent to which a specific
         increment or service causes the costs, should be allocated
         via mark-ups. The starting point should be equi-
         proportionate mark-ups. The models should allow for equi-                                                                                                                                             P                                        P
         proportionate mark-ups to be used for all cost categories.
         In certain cases, there may however be good reasons for
         departing from equi-proportionate mark-ups. Where this is
         the case, it should be justified in the model documentation.

CG 7     The models should include all standard PSTN/ISDN             PSTN/IDSN                                     A full list, based on the MRP list, is included in the routing table. It is a relatively
         services.                                                                                                  easy matter to add additional products. Note that additional products with small
                                                                                                                    volumes, not not have significant impact on the overall cost and the cost or on                         PP
                                                                                                                    the standard services.
CG 8     When dimensioning the network, the leased lines traffic    Take into account leased line demand            There are inputs for the total demand for non PSTN services. The costing
         volume should include leased lines provided to retail                                                      method makes no reference to whether the leased line demand is used by Telia
         customers, to other operators and to the network operator                                                  value added services, other operators or retail customers. To help ensure some
         himself. Leased lines services used by the network                                                         accountability of the input data, the total leased line demand (for retail and
         operator should not be double counted as "other services".                                                 operators) can be specified separately, but the model is dimensioned for the                            PP
                                                                                                                    combined demand. Demand for leased lines also increases the number of
                                                                                                                    access lines (copper and fibre) - input of the subscriber (end) numbers of
                                                                                                                    services on 2 wire, 4 wire and fibre is an input to the access model.

CG 9     Where possible, the models should categorise the “other    Two types of "other service" - cable TV et al   The demand on the network capacity placed by TV (including cable TV) and
         services” into two major groups:                           (non telecom) and data                          other data services are separate input items. The additional demand is included
          one category comprising cable TV services and other                                                       in the transmission capacity demand. Initial versions of the model have no
         services using their own “non-telecommunications”
         electronic equipment.
                                                                                                                    demand for TV related volumes. The user can chnage this. Later the cost of this
                                                                                                                    non PSTN demand is included from core model, using the relative demand c.f.
          one category comprising data services (by type) using the                                                 PSTN (in Mbit) as the basis. This criteria is not applicable to the Access model.
         core network.
CG 10    The models should identify busy-hour information for         Busy hour and allow for change in method      The cost driver for the network is the BH (busy hour) demand. Input of minutes
         traffic. The models should be flexible enough to allow for                                                 are converted to BHe (BH erlang) demand. This BHe dimensions the network
         changes in these figures.                                                                                  size (and hence cost). The product costs (in consolidation) routing table are
                                                                                                                    determined based on annual minutes and calls (results are a cost per minute or
                                                                                                                    per call made). The allocation of network costs to the products can be driven
                                                                                                                                                                                                                            P                           P
                                                                                                                    either by the call minutes or by the BHE values. The user may select the
                                                                                                                    method. In either case the results are still presented as a cost per minute.

cfb26a6f-43a7-4a4b-93dc-ae43b2978e86.xls                                                               CG                                                                                                                         4/17/2011
                                                                                                                                                                                                                                Access model
                                                                                                                                                                                                                   Core model
                                                                                                                                                                                                      Colo model
MRP #    MRP text                                                      Text summary                             How MRP is met in BU model
CG 11    The network dimensioning should correspond to what an Planning horizon                                 Demand growth data for future years are inputs. This is as a % of the base year
         efficient operator facing the forecasted demand would do.                                              data. The network "add-on equipment" can dimensioned for base year plus one.
         The models should show the anticipated Cumulative                                                      Infrastructure can be dimensioned for base year plus 5. Some equipment can be
         Annual Growth Rate (CAGR) for each service for a five                                                  dimensioned for base year plus 3. The user may define which cost category is
         year period, following the base year, 2001. The models                                                 subject to which growth period.
         should allow for a change in the margins for growth. The                                               There is a macro in the core model that in effect runs the model 3 times and
         models should use the following planning horizons as a                                                 stores the results. The runs use the 1, 3 & 5 year input data. The resulting
         starting point: 5 years for the access network and                                                     dimensioned costs (or physical network demand) are used. Thus some                    PPPP
         infrastructure in the core network; 3 years for exchange                                               elements use the 1 year data, others use the 3 year data and others use the 5
         equipment; and 3 years for transmission equipment. For                                                 year data.
         "add-on" equipment such as line cards, exchange ports,
         tributary cards and racks, a 1-year planning horizon should
         be used as the starting point. If different planning horizons
         are used, this will need to be justified.
CG 12    Cost categories should, as far as possible, be identified to One exogenous cost driver                 Cost drivers are implicit in the model and are a result of the technical design
         obtain only one exogenous cost driver for each category.                                               rules that dimension the network element demands. The dimensioned network
                                                                                                                sets the cost by using a look-up technique to cost data for the element using a
                                                                                                                cost volume relationship to get the cost of the actual sized element.
                                                                                                                The CVR is assumed to be piecewise linear. Large changes in size require a
                                                                                                                "look up" to a different cost input price list for the larger element. Typically an
                                                                                                                element cost is defined for small, medium and large versions.
                                                                                                                For Access, costs are generally assumesd to be linear (eg per cable km),
                                                                                                                modular (eg distinct sizes of cables and cabinets and line cards), according to
                                                                                                                the nature of teh cost item in each case.
CG 13    Costs related to assets can include capitalised operating    capitalise operational costs is allowed   Installation costs for an item can be definerd as an input cost. This is identified
         costs when there is a rationale for it. These costs should                                             as a separate cost input value. It is capitalised in consolidation, along with the
         be shown separately in the documentation.                                                              purchase cost of the item.                                                            PPPP

cfb26a6f-43a7-4a4b-93dc-ae43b2978e86.xls                                                                 CG                                                                                                              4/17/2011
                                                                                                                                                                                                                              Access model
                                                                                                                                                                                                                 Core model
                                                                                                                                                                                                    Colo model
MRP #    MRP text                                                      Text summary                             How MRP is met in BU model
CG 14    The modelled co-location services should include the          Colo costs to include (a list)           A full list of input cost items exist in the model. The MRP list is included. See
         following cost categories common to both co-location and                                               colo model for details.
         other services in the core and access network: Land and
         buildings (annual costs); Site preparation and fit-out of
         buildings (one-off and/or annual costs); Security systems,
         fire surveillance, etc. (one-off and/or annual costs);
         Power supply (annual costs); and Cooling/ventilation
         (annual costs). The specific co-location services to be
         costed include: Administrative staff (one-off costs);                                                                                                                                      P
         Technical staff (one-off costs); Racks (“ETSI-skåp”) (one-
         off and annual costs); Co-location specific power supply
         inclusive power consumption (one off and annual costs);
         Co-location specific cooling/ventilation (one- off and annual
         costs); and Cables (one-off and annual costs). Each cost
         category should include one-off and annual costs as
         shown above.
CG 15    The models should distinguish between the costs that are Need shared cost and direct costs identified Specific shared access service costs are listed as an input cost items and hence
         specific to PSTN services, costs that are specific to shared                                          carried through to consolidation for "splitting" to other services.
         access, and the costs that are shared between the PSTN
         services and the shared access service. The additional                                                                                                                                     P                         PP
         cost of shared access (compared to PSTN) should be
         shown as a separate output of the models.
CG 16    The total annualised cost of the actual (raw) copper pair   Total copper cost do not depend on service Copper-based services (PSTN or LLU) have the same cost drivers for the raw
         should in principle be the same whether it is used for      using it                                   copper regardless of the service using it.
         providing PSTN services, full access, shared access or bit-                                                                                                                                                          P
         stream access plus PSTN services.
CG 17    When modelling the cost of bit-stream access, the models Bit stream access and DSL & DSLAM             Input cost items include splitter and DSLAM equipment. These shall are
         should be able to distinguish between the costs of:        definitions                                 dimensioned by the service input-volume demand. Their costs are be allocated
         Capacity on the copper; capacity in DSLAM; and transport                                               to the final service in the consolidation model. DSLAM related equipment are
         of traffic from the DSLAM to the nearest point in the SMP                                              defined in the colo model.
         operator's ATM network. Costs related to installation of a
         filter at the customer's premises should be shown                                                                                                                                          P                         PP
         separately. The costs of the modem at the customer's
         premises should not be included in the cost of bit-stream
         access. The additional cost of bit-stream access
         (compared to PSTN) should be shown as a separate
         output of the models.

cfb26a6f-43a7-4a4b-93dc-ae43b2978e86.xls                                                                CG                                                                                                             4/17/2011
                                                                                                                                                                                                                                  Access model
                                                                                                                                                                                                                     Core model
                                                                                                                                                                                                        Colo model
MRP #    MRP text                                                       Text summary                               How MRP is met in BU model
CG 18    The models may use different methods of annualisation          Different annualisations needed in model   The default in the model is tilted annuities. The model allows a choice using in a
         (annuities, straight-line depreciation or sum of year digits).                                            nested if-statement to enable use of Sum of Years Digits or Straight Line, etc. to
         For larger classes of fixed assets, the method selected                                                   allow comparisons. The user may select the annualisation for each cost
         should in principle be that which best approximates                                                       category. The annualisation is defined in a Excel formula, created for the model.
         indicative estimates of economic depreciation.
         However, the starting point for the top-down model should
         be tilted straight-line depreciation, whereas the starting
         point for the bottom-up model should be tilted annuities.
         The choice of depreciation methodology may be justified
         by reference to a formal comparison between the different
         depreciation profiles and economic depreciation.
         International experience may also be used as justification
         to the extent that the annualisation methodology has been
         selected on a similar criterion (proxy to economic
CG 19    The models should use an interim nominal pre-tax cost of     CoC is 13.5%                                 An input cell specifies the CoC number. The model uses the same value for
         capital of 13.5%. The models should allow the cost of
         capital to be altered.
                                                                                                                   cost of working capital.
CG 20    The models should model the costs for 2002.                  model for 2002                               The question papers were issued, asking for volumes for 2002. An offline
                                                                                                                   calculation is required to take data from (say) monthly values to extrapolate into
                                                                                                                   annual values. This calculation depends on the date that the model is used and
                                                                                                                   the types of data supplied by Telia and other operators.

CG 21    The models should include a calculation for the cost of      include WC                                   The method specified in the earlier WC discussion paper is used, and this is also
         working capital of an efficient operator.                                                                 described in the model documentation.                                                                                         P
CG 22    The models should distinguish between set-up related and set up and duration related costs                Switch costs are broken down to elements - fixed, call-minute (BHe) driven, and
         duration related costs. This requires the calculation of both                                             call-number driven. The fixed processor costs are identified as a separate cost
         set-up and duration related costs, network elements and                                                   category, therefore the user may define an allocation to any cost element - and
         routing factors.                                                                                          so recover the cost via the per minute or the per call related network elements.                  P
                                                                                                                   Input volumes include both call numbers and call minute values. Detailed
                                                                                                                   network routing factors are defined in the routing table inputs.
CG 23    The models should show routing factors for (at least) each Need routing factors and NEs as per list as    The model includes the elements suggested, plus other elements. Note the
         of the following network elements: Concentrator (RSS or      minimum                                      model may have RSS at the same site as an LE (also sometimes called a HSS).
         HSS); Local Exchange (LE); Tandem Exchange (TE);                                                          A LE at the same site as a TS is possible. There is a possible call route - LE to
         RSS-LE transmission; LE-LE transmission; LE-TE                                                            TS - that does not use any transmission. The model handles such situations by
         transmission; and TE-TE transmission.                                                                     using the sub-route routing table technique. A percentage of calls may take this
         Information should be provided separately for all the major                                               route.                                                                                            PP
         call types. In addition, the documentation should include                                                 The Access Routing table employs similar principles of element usage and
         information (for all calls) showing the percentage of calls                                               element definition.
         following a particular routing pattern (e.g. 2 RSSs, 1 local
         exchange, 2 RSS-LE transmission links).

cfb26a6f-43a7-4a4b-93dc-ae43b2978e86.xls                                                                 CG                                                                                                                4/17/2011
                                                                                                                                                                                                     Access model
                                                                                                                                                                                        Core model
                                                                                                                                                                           Colo model
MRP #    MRP text                                                  Text summary           How MRP is met in BU model
CG 24    Access network elements should be split into geotypes     Geotypes needed        Cost inputs can be specified for some elements by the different geotypes. The
         where appropriate and "routing factors" (usage factors)                          model carries out a look-up technique to obtain the cost using both the
         specified for each service to be costed.                                         equipment size or type and also for rural, versus urban etc. The impact can be
                                                                                          seen for buildings and diggings. This effect is seen mostly in access.


cfb26a6f-43a7-4a4b-93dc-ae43b2978e86.xls                                             CG                                                                                                       4/17/2011
                                                                                                                                                                                                                              Access model

                                                                                                                                                                                                                Core model
                                                                                                                                                                                                   Colo model
 MRP #    MRP text                                                Text summary                  BU modelling approach
 BU 1     The bottom-up model should comply with the modified     Modified Scorched node        Nodes listed in an agreed Telia list of sites will be considered as nodes. Given the
          scorched node assumption where nodes are defined as                                   fragmented nature of the data provided, we clarify this to mean: (1) A site is only counted
          exchanges (including concentrators), the existing                                     as a node if it has a unique grid reference; (2) if a site has a grid reference, but no data in
          number and locations of sites are fixed, no empty sites                               numbers of lines (or if the data is unclear regarding how many lines the site serves), then
          are allowed and it is possible to change the number and                               its allocation to geotype will be estimated by the BUMT; (3) "sites" that are at the same grid
          mix of exchanges.                                                                     reference, or within 100m of each other, are counted as one "site"; (4) sites that are further
                                                                                                apart (in some cases, only slightly further apart) are counted as distinct sites.      Locations
                                                                                                are unaltered (other than adjustments for secrecy) . A node is defined as a site which is
                                                                                                identified as an existing switch, extended to include multiplexing sites. Equipment in the                      PP
                                                                                                nodes is free to change to any or all of: TS, LE, RSS or RSM. Switches/concentrators may
                                                                                                be co-located on the same physical site. All nodes have a related access network to cover
                                                                                                the zone. Existing RSMs have a zone (for access network costing) and are considered to
                                                                                                be scorched nodes for costing and optimisation in both core and access. The existing
                                                                                                scorched nodes, other than line cards and MDF costs, are costed as part of Core. This cost
                                                                                                attribution may be altered by the user.
                                                                                                RSM node sites may be allocated as if it were part of the immediate parent switch layer
                                                                                                (e.g. LE or RSS) or as the next Tx layer. The allocation is user-defined- the model allows
 BU 2     The core network in the bottom-up model should be          CCT switched               Circuit switched systems only, are modelled. Conventional trunk interfaces (2Mbit/sTDM)
          based upon a circuit-switched technology.                                             on SS7 switches are used.                                                                                       P
 BU 3     The predominant transmission technology should be          SDH transmission           SDH with up to STM 64 is used. Multiple systems may be used on one link. No DWDM is
          SDH. Other technologies such as DWDM could be                                         used. Microwave is used.
          included where they are cost effective. Microwave                                                                                                                                                     P
          transmission should be used only where fibre is not cost
 BU 4     The access network in the bottom-up model should           Fibre in access only for   (1) The model uses fibre for customers who have fibre NTPs already. (2) Given the
          model a fibre access network for customers connected       those that have it today   proportion of customers served via hybrid connections (under 0.1%), cost savings available
          with fibre today and equivalently model copper in the                                 from deploying fibre in access as a hybrid access loop are too small to justify modelling
          local loop for customers connected by copper today.                                   them, so FAMs are only costed in for customers on isllands that have no overland path to
                                                                                                their scorched node. (3) A customer who has 100% copper from an existing RSM/RSS/LE
                                                                                                site will continue to have this (it cannot be changed to a hybrid delivery mechanism).
                                                                                                MRPS allow a customer who already has a hybrid delivery technology to have the relative
                                                                                                length of fibre to copper varied. (4) MRPs do not set restrictions on how growth in
                                                                                                customer lines is to be provisioned for; and mix of fibre, copper, FWA, and hybrid solutions
                                                                                                is allowed. The model does not take advantange of this directly; it is up to the user to take
                                                                                                this freedom into account when setting overprovisioning factors and perhaps when setting
                                                                                                the cosntraints on the use of wireless technology. (5) The model can be adapted to have
                                                                                                more or less customers on copper, including some on fixed wireless delivery, and this can
                                                                                                be varied by zone and by geotype (also for inside Tatort / outside Tatort), for sensitivity

cfb26a6f-43a7-4a4b-93dc-ae43b2978e86.xls                                                             BU                                                                                                                      4/17/2011
                                                                                                                                                                                                                            Access model

                                                                                                                                                                                                              Core model
                                                                                                                                                                                                 Colo model
 MRP #    MRP text                                                  Text summary                 BU modelling approach
 BU 5     The bottom-up model should demonstrate that the           GoS                          The dimension of network elements (NEs) is based on technical design rules. Some are
          optimised network provides services at an appropriate                                  erlang driven and so GoS is relevant. A GoS per element is specified, this must be set be
          level of quality for an efficient SMP operator.                                        low enough so that, on average, concatenated equipment results in a low enough end-to-
                                                                                                 end GoS. Round-up on equipment sizes will also ensure GoS minimum level is exceeded.
                                                                                                 QoS also includes reliability and failure compensation requirement. Alternative routes and
                                                                                                 dual parenting are employed from LE to TS. RSS to LEs are to be assumed to have one                          P
                                                                                                 logical link but in most cases dual physical links from the ring structure (some geographical
                                                                                                 areas might mean no physical diversity of links e.g. spurs to small islands). Dual TS (as
                                                                                                 required in Telia for defence reasons) are not modelled, as specified by PTS.

 BU 6     The bottom-up model must be able to demonstrate that      Must be able to carry        Switches and transmission systems includes additional capacity to cover both forecasted
          the optimised network can carry the dimensioned           demand                       demand (time horizon is defined by other criteria) and to meet engineering requirements for
          demand.                                                                                prudent additional capacity. Systems also use a round-up to the next available system
                                                                                                 size. Local loop delivery technology is as as used at present (copper cannot be
                                                                                                 substituted by fibre and vice versa). MRPs allow Wireless delivered customers to be                          PP
                                                                                                 changed to any technology. Model allows overprovisioning requirements for wireless
                                                                                                 customers to be based on numbers of lines, total data rate, or both.

 BU 7     When measuring the level of PSTN traffic, the bottom-up Unsuccessful calls, ringing The model adds in an effective additional call demands to dimension the NEs. This is an
          model should take unsuccessful calls and ringing time   and hold time               additional data for each product that "uplifts" the actual billed call minutes and call attempts
          into account.                                                                       values. The network is dimensioned for the uplifted demand, but services are costed at the                      P
                                                                                              end using the actual call minutes.
 BU 8     The model should show the demand for leased lines by Leased line demand by          The model uses total Mbit/s of Tx used on each of the other services. The user must input
          number of circuits by capacity bandwidths.              circuits and capacity       the demand for other services - typically supplied by Telia. The demand data shall is also
          Demand for other services should be shown by different                              profiled so that some services use more of the trunk transmission c.f. the junction
          categories of services and, within each category, by
          different capacity bandwidths.
                                                                                              transmission between (say) RSS and LE. There is an input of the distribution in length of
                                                                                              the different services. The leased line (and other service) demand is required to include
                                                                                              number of customer ends to enable the access network to be dimensioned fully.

cfb26a6f-43a7-4a4b-93dc-ae43b2978e86.xls                                                              BU                                                                                                                   4/17/2011
                                                                                                                                                                                                                            Access model

                                                                                                                                                                                                              Core model
                                                                                                                                                                                                 Colo model
 MRP #    MRP text                                                  Text summary                BU modelling approach
 BU 9     The routing factors used in the bottom-up model need to   Route factors should be     Routing factors are specified for a 3-level system. The starting point for defining the routes
          be consistent with the underlying network architecture    consistent with network     is the number of nodes in each layer and hence the likelihood of the call being destined for
          and identified separately for each service.               arch and defined for each   other regions (e.g. via Transits). Similar logic enables % calls to be be defined that are
                                                                    service                     within one LE zone c.f. else dual-LE-based calls. Telia data could be used, as this can
                                                                                                show traffic trends and amounts of traffic that are inter-region versus in-region. The actual
                                                                                                number of nodes of each type in the model may be different from Telia's, so the route
                                                                                                factors will have to be adjusted by the user. Some LE-LE calls are allowed to account for
                                                                                                local meshing, where economic. The table dimensions the network and it is also used to
                                                                                                cost the products (in Consolidation).                                                                         PP
                                                                                                If the node numbers change significantly, the routing table probabilities must be altered
                                                                                                manually. The model also has a function that adjusts the route probabilities, depending on
                                                                                                the revised numbers of switch nodes to give a way of updating the routing table under
                                                                                                optimisation. The Access table defines the dimensions of the Access Network and enables
                                                                                                the services to be costed in Consolidation.

 BU 10    The bottom-up model should show how service-specific      Service specific resilience Design rules include the following. Dual logical links or dual parenting (where required -
          adjustments for resilience have been taken into account   needed                      e.g. LE to TS). Logical meshing (e.g. TS to TS). Physical diversity - rings or dual spur
          in the given network architecture.                                                    links where needed (typically a percentage of RSS or a few LEs in unusual geographic
                                                                                                locations where a ring access is not suitable). Rings will have auto-restoration (capacity to
                                                                                                cope with one cut in the ring). Major sites can have additional meshing, inter-site, beyond
                                                                                                a ring to give additional resilience. Uplilfts in some services' demands shall be applied to
                                                                                                allow additional capacity for the service to be created (thus an uplift of 2 doubles the
                                                                                                designed network capacity over the actual customer traffic). This may be used on data or                      P
                                                                                                leased line services too. Switch systems are costed with a specification that is suitable for
                                                                                                the application - the equipment will have the redundant features expected of an SMP-
                                                                                                operators' network to give the reliability that is needed. Buildings have power etc as
                                                                                                expected for an SMP operator with power backup for larger sites to enhance reliability.

 BU 11    Data on "busy hour" traffic should be requested from the Busy hour data from SMP      The network is dimensioned to cope with the busy hour demands. The network's busy hour
          SMP operator, where major differences in terms of traffic operator                    defines the dimensional requirements. Each service's annual demands are related to the
          distribution over time should be identified between                                   network's busy hour using a fomula. This factor can be defined by time of day/day of week
          different parts of the network and the impact of other                                profiles for the service. Regional (country issues) are dealt with mainly though the different
          services.                                                                             design for north and south Sweden - different design rules apply to each region. The                          P
                                                                                                conversion to BHE formula may be used to allow for seaonal variations and for population
                                                                                                fluctuations within a year - it can be used to inflate the BHE value over that which might be
                                                                                                used if we assumed there were no seasonal changes

 BU 12    Equipment prices and other cost data used in the bottom- Prices of an efficient SMP   This price input is an underlying assumption that defines the input costs. The model does
          up model should reflect those of an efficient operator   operator                     not adjust the input value - any adjustment to costs to reflect an SMP-sized operaor must
          with the bargaining power of an SMP operator in                                       be done off-line before entry into the model.                                                    PPP

cfb26a6f-43a7-4a4b-93dc-ae43b2978e86.xls                                                             BU                                                                                                                    4/17/2011
                                                                                                                                                                                                                             Access model

                                                                                                                                                                                                               Core model
                                                                                                                                                                                                  Colo model
 MRP #    MRP text                                                    Text summary                BU modelling approach
 BU 13    As a starting point, the bottom-up model should consider    3 layer hierarchy           No strong evidence for other than 3 layer switching hierarchy has been received. The
          a hierarchical exchange structure with three layers.                                    model assumes 3 layers. The routing and network design allows some LE-LE layer routing
          However, provided that a different hierarchical exchange                                (an effective 2 layer network is more economic in some city areas). Telia routing data
          structure can be justified this may be modelled. The                                    might be used by the user as an "inspiration" to a more optimum use of network resources.                    P
          definition, and purpose, of each layer of the hierarchy
          should be clearly defined.
 BU 14    The optimisation in the bottom-up model should consider     Consider optimisation on Technical feasibility has been set out in the earlier Discussion papers - only technology that
          the following factors: cost, the impact on other parts of   cost, network, security tech is supported by BUWG members is included. A "conventional" network design is used - no
          the network, security, technical feasibility, and           feasibility etc.             IP or ATM. Security and network impacts are constraints like GoS (see above). The model
          consistency with the evolution of the telecom networks.                                  can adjust input factors such as GoS and resilience design rules (e.g. bandwidth uplifts and
                                                                                                   meshing factors) to give lowest cost. This does not allow cross optimisation - i.e. one                     PP
                                                                                                   cannot "simply" trade one or other off in the model - changes must be done manually. In
                                                                                                   general, each design rule must stand on its own merits (e.g. security = dual link) and would
                                                                                                   not be traded off with another design rule.

 BU 15    The bottom-up model should show and justify the             Justify technologies        Technologies were implicit in the discussion papers. No members have proposed radical
          technologies used in each part of the transmission                                      changes from circuit switched/ SDH/optics as central technology. Microwave is used on
          network.                                                                                some links. Access is constrained by MRPs to have copper and fibre where they are
                                                                                                  deployed today - hence no technological innovation is implied. Muxing technology is
                                                                                                  allowed to replace RSS/LEs. The number of these will be considered and adjusted to give                      PP
                                                                                                  lowest cost. Use of cross connects depends on the traffic and flexibility required. As the
                                                                                                  technology used in the model is conventional and used extensively, the basis of the model
                                                                                                  meets the MRPs.
 BU 16    Given network technology and configuration, the optimal Take account of                 The model has the "automatic use" of technical design rules (they are built in to the
          size of the transmission equipment has to be the result infrastructure cost on          fomulae) and the lowest cost design selection is done by by varying numbers of different
          of a cost minimisation problem that also takes into     transmission costs              node types. The user must adjust the numbers of such nodes, noting any engineering
          proper account the associated infrastructure costs.                                     limits that might be neeeded (thus the cost optimisation might be for 2 elements but
                                                                                                  prudent resiliece rules might suggest a minumum of say 5 elements). The model does not                       PP
                                                                                                  make subjective decisions on resilience limits to optimisation. The user must make the
                                                                                                  decisions. Optimal design should also consider the sharing of trench and duct costs (core
                                                                                                  and access sharing as well as sharing with other utilities).

 BU 17    The model should estimate equipment quantities for the Use maps for access              GIS data and maps should be used. Road length data is a key input, and the values used
          access network using detailed maps and other                                            in the model are chosen so that the total road length in Sweden is consistent with national
          information for a statistically valid sample of areas. In                               totals. This external analysis supplies the input values for the model itself but does not
          the absence of such information, alternative approaches,                                form an integral part of the model.                                                                                       P
          such as data from the SMP operator and international
          benchmark data may be used.
 BU 18    The bottom-up model should show infrastructure costs of Infrastructure, cable and       Cable, ducts and trenching (digging), & pole demands are "calculated inputs" and each are
          cable, duct and trenches separately.                      duct separate costs           dimensioned separately - driven by demands for services (transmission capacity and
                                                                                                  access demands). These items are maintained as separate cost categories in the                               PP
                                                                                                  consolidation model

cfb26a6f-43a7-4a4b-93dc-ae43b2978e86.xls                                                               BU                                                                                                                   4/17/2011
                                                                                                                                                                                                                           Access model

                                                                                                                                                                                                             Core model
                                                                                                                                                                                                Colo model
 MRP #    MRP text                                                  Text summary                BU modelling approach
 BU 19    The assumptions regarding distances between nodes         Node distances needed       Inter node distances are based on actual node locations and hence inter-site distances
          belonging to the same layers and also between nodes                                   (node locations to be supplied by Telia). Crow flight distances are converted to average
          belonging to different layers, on which the amount of                                 physical distances by conversion factor (user-defined input to the model). Links between
          trench modelled rely on, should be clearly identifiable                               nodes will not assume that all links are to the next nearest node, as this cannot be
          and justified for each part of the network.                                           achieved in the real world - some links must go to nodes other than the nearest. Design
                                                                                                rule used: inter-node average crow flight link distance is the average distance to the                       P
                                                                                                second nearest node. Logical path link distances are the average numbers of node hops
                                                                                                times the average link distances. The calculation of inter-node distances is an off line item
                                                                                                and does not form part of the model itself. Node locations are not held in the model.

 BU 20    The bottom-up model should take proper account of         Terrains and geotypes       Terrains types are specified inputs and the percentage of digging in each terrain type is an
          different terrains and geo-types when costing trench.     must be considered          input. The user can define the % digging in earth versus under tarmac etc., based upon
                                                                                                their experience/knowledge of the Swedish road and country layout. This terrain factor may                   PP
                                                                                                vary by geotype, and(in the case of Access, where the distinction is particulary important)
                                                                                                by inside Tatort / outside Tatort.
 BU 21    The bottom-up model should show and justify the            Buried and ducted cables   Digging input data and cable design rules require an input of the amount of cables that are
          amount of cable (out of the total amount of trenches       must be identified         direct versus duct-buried. The % of each is an input. For Access the model allows for
          modelled) that is put in duct (as opposed to buried cable)                            some cables to be installed on poles. For both Core and access networks, a proportion of                     PP
          on the basis of general cost and quality considerations.                              fixed links will be served by submarine cable.

 BU 22    The bottom-up model should show and justify, for each     Show size of duct           Duct demands are an input that depends on the transmission demand on the link (or part of
          part of the network, the size of the modelled duct.                                   the access network). Total duct numbers (ie effective duct size) can vary depending on the
                                                                                                network demand for cable numbers or sizes. Buried (no duct) cable may be used when                           PP
                                                                                                specified by the user as the best solution.
 BU 23    The bottom-up model should show the amount of duct        Show common core and        A sharing factor is required to show the amount of sharing between core and access of
          and trench that is common to the core and the access      access duct & cable         ducts. Shared digging/ducts costs shall be allocated to core and access. % split of costs
          network and any other utility.                                                        is a user-defined input. The amount of sharing are calculated in the core network model
                                                                                                and the costs transferred to Access in Consolidation. Cable TV and sharing with utilities is                 PP
                                                                                                also possible and the shared amount of duct/trench is allocated to other services in core
                                                                                                model and are ignored.
 BU 24    The bottom-up model should as a minimum consider, for Consider routes sharing         Total demands for traffic define the total cable demands and hence ducts and route
          each layer of the network, route sharing, trench sharing, trench, sharing route       demands.
          average route lengths and total amount of modelled duct length et al
          in order to determine the cable size requirements for                                                                                                                                              P
          each part of the core network in terms of number of fibre
          pairs per cable.

cfb26a6f-43a7-4a4b-93dc-ae43b2978e86.xls                                                            BU                                                                                                                    4/17/2011
                                                                                                                                                                                                                                  Access model

                                                                                                                                                                                                                    Core model
                                                                                                                                                                                                       Colo model
 MRP #    MRP text                                                 Text summary                       BU modelling approach
 BU 25    Given cable size requirements, for each part of the      Modularity of cables               The model has various sizes as required, depending on the demand. Prudent engineering
          network, the bottom-up model should take into account                                       suggests rounding up to the next modular level and initially allowing for several "spare"
          cost considerations and modularity of cables to work out                                    fibre pairs - the model does not have a very low spare overhead (1 spares pair is too low,
          the optimal combination of cables of different sizes.                                       but more than 10 probably too high on a 20 pair cable). It is expected that majority of the
                                                                                                      network will have the same numbers of fibres in cables - as even a cable with only (say) 20
                                                                                                      pairs has adequate capacity for almost all situations (using STM 64). The model has costs                     PP
                                                                                                      for a number of different cable sizes. The user may select a percentage of cables to be of
                                                                                                      different sizes. The initial values entered for Core assume all cables are all 48 fibre pair;
                                                                                                      for Access; we assume a mixture of smaller sizes. This is probably "over-engineering" (too
                                                                                                      much spare capacity) as most Core cables could be much smaller. The user may alter the
 BU 26    Given optimal combinations of cables of different sizes,       Cable length to include      Physical lengths are translated to bought length using a waste-age factor. Factor may vary
          the bottom-up model should consider the trench length          cable waste                  depending on the cable type. Wastage factors are to be defined by the user. For Access,
          for each part of the network to work out the total length of                                the link between trench length and cable length is less direct, as one trench may hold
          cable of different sizes. This should include the cable                                     cables of several different sizes and of varying lengths, so the two aspects are modelled                     PP
          waste that an efficient operator should expect due to                                       separately.
          cutting-off and modularity.
 BU 27    Building space costs should be determined as a cost per        Building space on square     Costs per square meter will be used in the model. These can be determined using "off-
          square metre. The values should be categorised by geo-         meter                        line" calculations using data from Telia and other operators to determine the fair cost of
          type.                                                                                       buildings in the different geotype zones. Equipment will have a space demand (cost driver)       P
                                                                                                      and this will be used to determine building space costs. An uplift to the actual physical
                                                                                                      space demand will be included to cover common space costs.
 BU 28    Indirect costs should be calculated in the most                Show indirect costs and      This includes common building space (see above) and also power/cooling costs. These
          appropriate manner taking into account the availability of     use appropriate              common costs will be allocated using a mark-up (or uplift) to the building cost per square
          information and the materiality of the cost category in        calculation, justify mark-   meter. Ideally power consumption would be used as the driver basis, but consumption
          question. Where “mark-ups” are used, they should be            ups if used                  costs of used wholesale equipment and that of other increments is hard to define                 PPP
          justified and should reflect an efficient level of indirect                                 accurately - hence the proxy driver of area will be used.
          network costs. All indirect network costs should be
          shown separately.
 BU 29    Overhead costs should only be included if they are             Wholesale core and           No other increments (e.g. Retail) are calculated so the other retail incremental costs are not
          efficiently incurred in building and operating a wholesale     access network only          be included. Some common costs of other increments may be calculated, but these costs
          core and access network in Sweden.                                                          can excluded and allocated to other increments in consolidation, if needed. Common                            PPP
                                                                                                      business overheads are allocated in consolidation
 BU 30    Operating costs should be calculated in the most             Use capital mark-up for        Business areas are defined and the dimensions of each defined as numbers of staff
          appropriate manner taking into account the availability of opex                             needed. A cost per staff member enables the operating costs to be defined. These are
          information. Where “mark-ups” are used, they should be                                      allocated to capital items in proportion to the initial estimate of operating costs (initially
          justified and should reflect an efficient level of operating                                entered by the user as a percentage of the capital cost). The size of each business area         PPPP
          costs. The approach should be justified.                                                    can be flexed about the default value, based on some variations in the demand (say #lines
                                                                                                      or # switches). If equipment prices change then capex may change but total opex would
                                                                                                      not change.

cfb26a6f-43a7-4a4b-93dc-ae43b2978e86.xls                                                                  BU                                                                                                                     4/17/2011
                                                                                                                                                                                                                                 Access model

                                                                                                                                                                                                                   Core model
                                                                                                                                                                                                      Colo model
 MRP #    MRP text                                                    Text summary              BU modelling approach
 BU 31    When estimating operating costs, the model should allow     Remember ineffective time Staff numbers for business areas take account of real staff utilisation factors and the useful
          for ineffective time when calculating labour costs. The                               working hours per staff member. This was made clear in the Q papers to the operators.
          percentage of ineffective time should be justified in the                             The accuracy of the staffing level depends on the quality of the operators' estimates.                PPPP
          model documentation.
 BU 32    The level of working capital should be calculated using     Working capital debt and    The working capital is modelled as per the model documentation and as discussed in an
          weighted averages of debtor and creditor days, with an      creditor days               earlier paper The WC cost is added as a mark-up to service costs in consolidation.
          adjustment made to include a prudent level of cash                                                                                                                                                                                    P
          holdings. All inputs and underlying assumptions should
          be justified.
 BU 33    Final cost allocation, from network elements to core        Cost allocation from NEs    the routing table from core is sent to consolidation to enable product cost calculations. The
          services, should be based on the total volume of traffic    to services is on minutes   consolidation model uses only annual minutes to calculate the products costs, but it also
          (rather than the busy hour).                                                            allows some choice of call-minutes or busy hour erlangs as the basis for cost allocation, to
                                                                                                  allow the required flexibility to test the sensitivity to this assumption. No uplift of products'                P                            P
                                                                                                  costs is used to reflect addition call attempts, hold times or busy hour profiles of the
                                                                                                  products (these factors are only used to dimension the network).

 BU 34    The bottom-up model should be structured so that the       Show principles of           Model has many text comments and some formulae/algorithms are described further in
          key principles and the most significant algorithms used    algorithms                   documentation. Colour coding of inputs and calculations cells is used. Formulae are not             PPPP
          are clearly shown.                                                                      hidden.
 BU 35    The bottom-up model should be able to identify key         Verify key inputs            Documentation report shows cost changes with variations in some of the major input
          inputs as the ones the cost estimates, at least at service                              parameters. Complete analysis is impossible (too many inputs). Sensitivity analysis
          level, are most sensitive to and perform a sensitivity                                  cannot be properly carried out until sensible input data is entered (test data is used in v1.0).
          analysis on these. These include:
            Traffic volumes;
            Equipment prices;
            Utilisation rates;
            Quality of service parameters;
            Sharing parameters;                                                                                                                                                                       PPPP
          Key technical input and network design rules;
            Cost of capital;
            Asset lives;
            Price trends;
            Cost-volume relationships;
            Operating costs; and
            Indirect costs.

cfb26a6f-43a7-4a4b-93dc-ae43b2978e86.xls                                                               BU                                                                                                                       4/17/2011

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