3.3.1.1 Charging and accounting principles for NGNs
Allocation efficiency requires that resources, products and services are allocated to the person or persons who value them the most. For this to happen, consumers of final products or services should pay prices that reflect the cost of the resources used to provide those products or services.
Several variants for calculating “x-LRIC” (long-run incremental costs or long-run average incremental costs (LRAIC)) were used in the past to determine the cost components and it is recommended to consider all costs incurred. Standard revenue margins need to be considered to guarantee business sustainability. (See Annex 3 – Approaches to costing of telecommunication services).
Costing should be based on capacity in terms of resources utilized. It must be taken into account that packet mode switching uses resources as a function of the packet flows through the network, rather than time.
The generic activity-based costing (ABC) method allocates direct and indirect costs to a service as a function of the cost drivers for any service using the network resources. Indirect costs are allocated based on an analysis of cost drivers. These activity-based costs constitute the directly and indirectly attributable costs