Cartesian develops fixed and mobile network cost models to support business cases and investment decisions. Regulatory agencies also call on us to develop and audit the models that underpin charge controls for wholesale access and network services.
Why build a network cost model?
Network cost models are an essential to evaluate investment decisions, assess entry options, understand product profitability, and set the price of regulated wholesale services.
Accurately modelling network costs requires both technical understanding and expertise in financial analysis. As specialists in the telecoms sector, Cartesian has both and is able to apply practical insights from real-world network design into its cost models.
For service providers and investors, we are most often called upon to answer questions such as: What is the business case for expanding an existing metro fiber network? What is the cost per home passed for FTTH? Or, how do the costs of going straight to FTTH compare with using FTTC as an interim step?
Working for regulatory agencies, Cartesian has developed cost models for Mobile Termination Rates (MTR), Fixed Termination Rates (FTR), Passive Infrastructure Access (PIA), Local Loop Unbundling (LLU) and Virtual Unbundled Local Access (VULA).
We are experienced in assessing costs from top-down and bottom-up perspectives, for specific operators or hypothetical entrants. Depending on the need we provide outputs on a fully allocated or incremental cost basis. We also have the tools and expertise to run complex geospatial analyses in-house.
Examples of our work include:
- Developing a Long Run Incremental Cost (LRIC) model of a hypothetical NGN for Ofcom
- Analysing the economics of Passive Infrastructure Access (PIA)
- Building a bottom-up cost model of Fibre Broadband in a national VDSL / Fibre to the Cabinet (FTTC) network
- Estimating the cost of a broadband universal service
Cartesian supports service providers, regulatory agencies and investors to understand the underlying economics of existing networks and potential new deployments.