Total Service Long-Run Incremental Cost Modelling in Broadband FTTx Architectures

Abstract:
This paper proposes a method for the estimation of the cost contribution of FTTx broadband access networks to the long-run incremental costs (LRIC) of the services carried on these networks. The approach is applicable to the analysis of the techno-economic efficiencies of the business models enabled by the disaggregation of the access network infrastructure. This is achieved by dimensioning first the access network for an expected service demand. The network capital and operational expenditures are then calculated and allocated to the services. The goal is to quantify the dependency of the LRIC on the architecture and technologies that build the access network. For selected business models, results are discussed for a case study that considers IPTV, VoIP and Internet services supplied over FTTx networks implemented by active and passive optical technologies. The results show that the disaggregation of the access network causes service cost savings w.r.t to the traditional vertically integrated business model. Furthermore, we show that FTTx solutions based on active and passive technologies attain similar service costs.