Cost allocation of WCDMA and wholesale pricing for mVoIP and data services

Authors:
Byung Woon Kim;Joonho Park;Chang Youl Ko
Affiliations:
University of Science and Technology, ICT Policy Research Team, ETRI, 218 Gajeongno, Yuseong-gu, Daejeon 305 700, Republic of Korea;Department of Accounting, Hanyang University, 222 Wangsimni-ro, Seongdong-gu, Seoul 133 791, Republic of Korea;Department of Accounting, Hanyang University, 222 Wangsimni-ro, Seongdong-gu, Seoul 133 791, Republic of Korea
Venue:
Telecommunications Policy
Year:
2013

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Abstract

This study estimates cost-based prices for wholesale voice and data services provided to 3G (WCDMA) MVNOs according to their distinct types. For estimation, 3G MVNOs are classified into different types, and the overall cost of WCDMA facilities are separated into voice and data components based on their subscriber rates, actual traffic rates, as well as efficiency consideration of traffic rates. The study then calculates cost-based wholesale prices of voice and data services for each of the 3G MVNO types. The result of this study shows that a cost-plus pricing scheme can help achieve the policy goals of the regulator, namely, lowering telecommunications tariffs and facilitating the introduction of new convergent-type services, far more effectively than the current retail-minus pricing scheme. The findings of this study may assist firms in developing business models based on 3G networks and telecom regulators in designing policies related to interconnection, mVoIP, prepaid calls, wholesale services, and network neutrality.