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Access model
Consolidation
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.
cfb26a6f-43a7-4a4b-93dc-ae43b2978e86.xls CG 4/17/2011
Access model
Consolidation
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.
P
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
Consolidation
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
PPP
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
Consolidation
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
Consolidation
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
P
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
depreciation).
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.
P
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.
PPP
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
Consolidation
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.
PPP
cfb26a6f-43a7-4a4b-93dc-ae43b2978e86.xls CG 4/17/2011
Access model
Consolidation
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
effective.
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
P
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
Consolidation
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
PP
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
Consolidation
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
Sweden.
cfb26a6f-43a7-4a4b-93dc-ae43b2978e86.xls BU 4/17/2011
Access model
Consolidation
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
Consolidation
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.
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Access model
Consolidation
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
values.
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.
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Access model
Consolidation
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
