Network elements demand estimating model for mobile LRIC

Abstract

Termination access service on mobile networks is regarded as a bottleneck service in many countries, and is regulated based on its cost. For cost-based regulation, the historical cost based on accounting data was used in the past. Recently, however, the application of long run incremental cost (LRIC) based on the bottom-up approach has been on the rise, as is the case with wireline networks. In order to estimate LRIC, it is necessary to design a mobile network according to engineering criteria, to estimate the required numbers of individual network components and to convert them into an investment cost. In wireline sector, network design methodology has been established relatively well for estimating LRIC. In mobile sector, however, more studies are required on the methodology for designing networks and estimating required numbers of individual network components. This study reviews foreign cases of bottom-up approach for mobile LRIC and then presents methods of designing mobile networks and estimating required numbers of individual network elements suitable for Korean situation.