Summary
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But the real costs of providing international telecommunication services will probably never be known. And even if they were known, the cost structure would probably have changed by the time the study had been completed. It is possible to use cost models to achieve almost any desired result. For consumers, it is the price not the estimated cost which is the issue. For regulators, it is the negotiated interconnect price rather than the true underlying cost which is significant. For PTO managers and shareholders, it is the overall package of costs, rather than their allocation to individual services, which needs to be managed.
Ultimately, models for allocating cost are mainly of academic interest.
Figure 4: Sliding downwards
Price trends for global average settlement rates, 1987-98, and for US retail rates and settlement rates, 1990-1997, in US$ per minute
Note: In the left chart, the "global average settlement rate" is based on responses to an annual
questionnaire carried out by the ITU. In the right chart, the retail price is calculated by dividing the revenue per minute billed by US carriers by the total number of outgoing international traffic minutes. The "settlement rate" is an average US settlement
rate for all routes weighted by traffic.
Source: ITU, FCC. |
It is possible to use cost models to achieve almost any desired result |
