Telecommunication Industry.

In: Computers and Technology

Submitted By kenstew20
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Telecommunication Industry.

Communication networks in the digital world make possible joint production of a range of different services for a diverse group of customers. In the case of telephony, technological development has increased economies of scope far beyond joint production of voice and fax connection. For most calculation purposes, this means that the old costing systems and allocation assumptions stemming from the days of national voice telephony simply do not offer relevant facts any longer. This is true for internal decision making in the telecommunications, but perhaps more importantly for setting interconnection charges.
Activity Based Costing (ABC) is an alternative to or improvement of previous costing practices. The activities in telecommunication network can be process steps and switching. For example, a long distance call passes by several switching processes. In this case, we can calculate cost per switching following the call time and distance used by subscriber. In the central process steps in telecommunication network, cost varies according to traffic. Call consists of switching, connection before call, and call connection. In this operating level, cost driver is the number of switches in switching process and the time to call in channel and transmission process respectively.
Activity Based Costing (ABC) is an alternative to or improvement of previous costing practices. The activities in telecommunication network can be process steps and switching. For example, a long distance call passes by several switching processes. In this case, we can calculate cost per switching following the call time and distance used by subscriber. In the central process steps in telecommunication network, cost varies according to traffic. Call consists of switching, connection before call, and call connection. In this operating level, cost driver is the…...

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