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Cost Allocation Model
Eric Tyson
Bratislava September 18th 2001
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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
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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
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CAMCost Allocation Model
Current Account
Costs OutputReportsP&L by serviceDrill downetc
Network and non financial
Data
Cost Allocation Model
MPManpower Activity
Module
ManpowerActivities
CapitalCosts
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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
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CAM Demonstration
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InterConnect CommunicationsEric TysonMerlin HouseStation Road ChepstowNP16 5PB United Kingdom
Telephone: +44 1291 638400Fax: +44 1291 638401Email: [email protected]: www.icc-uk.com