Cost Allocation Model

Eric Tyson

Bratislava September 18th 2001

Local Exchange

Trunk Exchange

Internationalexchange

TelephoneTelephone

Local Access

Junction Tx

Trunk Tx

Trunk Tx

LocalAccess/Local

Switching

TrunkSwitching

International

Trunk Tx

Trunk Exchange

Local Exchange

RCU

Transit/IN

Cost Allocation Model Objectives

�Enables Telecommunications Operators and regulators to understand:–the costs of providing individual services over a

common platform–the cost elements of each individual services

including interconnection–the profitability of individual services

CAMCost Allocation Model

Current Account

Costs OutputReportsP&L by serviceDrill downetc

Network and non financial

Data

Cost Allocation Model

MPManpower Activity

Module

ManpowerActivities

CapitalCosts

The Basic Algorithm

�Capture input costs and categorise to internal standards�Spread these costs across business function/activity

codes�Aggregate the resulting cost pools across major

account type groupings (employee, materials, finance, outpayments, depreciation, other costs)�Allocate the resulting cost pools contents to destination

service pools (rule-based)�Transfer all costs at each stage

CAM Demonstration

InterConnect CommunicationsEric TysonMerlin HouseStation Road ChepstowNP16 5PB United Kingdom

Telephone: +44 1291 638400Fax: +44 1291 638401Email: erictyson@icc-uk.comWebsite: www.icc-uk.com