The following describes some of the services
available and examples of past work.
We help in three main ways
Consulting: problem solving, reports, systems delivery, bespoke projects
Advisory: help with problems and options. What might happen if...? What are the risks? Where
has this happened before? How else could this be done?
Interim management: work with your teams and
lead or assist in projects
Example work areas
Training, workshops and knowledge
transfer
Roger has delivered many workshops, training courses and conference papers. He is a regular
chairman at international events on: Telecom Regulation; Costing; Pricing and Interconnection.
This experience can be
used for courses tailored to help your own teams.
Please ask via the home page for possible workshop
and training course subjects. The biography page lists examples of the workshops that have been delivered
Telecom cost and profit systems including regulatory
accounts
A wide range of tools can be developed to meet any business requirement.
Fixed, Mobile, Fibre Access, Copper Local Loop, IP, international carrier services, have all been modelled. In
recent years the focus has moved to NGN and NGA services ( IP and FTTx). The dangers of making the wrong investment
or pricing decisions are clear. Mobile data costing is one example: the cost driver of increasing data demand is clear.
What is the lowest price that is safe?
Cost systems (optionally to include revenues for profit measurement)
can vary from simple to advanced spreadsheet tools. These provide a solid basis and meet many operators' needs.
Processing fixed asset registers and general ledger data is often best done in a database, due to the data size. MS
Access tools can supplement an Excel tool. This eases management and development.
The entire cost and profit
system can be implemented in Access. This avoids some of the inherent problems of spreadsheets as management tools.
10 allocation stages and reports by cost multiple type, are easy to produce.
A full ABC IT platform is also possible.
The Pilbara Group ACE system is an excellent example. Larger telcos will need to use such as system.
Telzed can work with any ABC platform.
The choice depends on business needs, in house skills, budget and IT
standards. A regulated operator will also need to meet directives from the Regulator on Regulatory Accounts
and reporting. Regulatory accounts can be built, specified or reviewed. We can build a system or work with your
teams to develop the best solution. What ever solution is chosen, it should be regarded as a central tool for helping
to manage the business: it should grow and adapt with the business over time.
Strategy advice
Many projects
include strategy advice and assistance. Roger has helped with many such projects. Business strategy discussions
may be focussed on regulatory threats or opportunities, or how these might impact the wider business plans. The wholesale
services and interconnection regimes are arguably the most influential issues in the telco market. A full understanding
of these are vital when developing a strategy.
Smaller strategic projects can focus on dealing with the regulator
or with negotiating interconnection regimes. Regulators must have a strategy.
We can help in various ways with
expertise and advice.
Telzed does not usually offer to deliver overall business and market strategies: usually the
work is more focussed on specific areas. We can then supplement your own strategy teams. Telzed also
has links to other strategy and marketing specialists for a complete strategy service. Telzed carried out a strategic
review for a nation regulator of the nation broadband strategy - the report and workshop showed good and negative aspects
and supplied a programme to move forward..
Bottom up cost models
Many
services do not yet exist or are only in the early stages. Historic accounts and cost data therefore do not exist.
Normal discounted cash flow business plans have their role to play, but to enable complex network modelling and regulatory
economic insights, "bottom up" models have been developed. These Long Run Incremental Cost (LRIC) tools are
now used across the globe.
These models can be combined with top down (accounting) data to make hybrid systems.
We can help to develop these and Roger has helped both regulators and operators build or modify such systems. Bottom up models have been built and reviewed. BU model have become something
of fashion for regulatory costing, but Telzed has noted that some models can have serious flaws and they are
not always used properly. There is a related discussion on BU model on the Discussion page. The dangers of poor
modelling work are significant: please discuss the subject with Telzed if these are not immediately obvious.
Regulatory consultations, regulatory economics and
regulatory processes
Public consultation papers can be produced or responded to. These are critical to
the development of the telecom market. Roger has helped operators and regulators in such processes and produced
reports and white papers.
Examples include: definition of WACC; retail price control procedures; mobile termination rate
asymmetry; the use of SIM boxes to by pass termination rates and account settlements; theoretical opex levels for EU copper
local loops based on FCC ARMIS data; examination of the possible correlation of MTRs with costs in Europe; public hearings;
requirements for LRIC models; examination of wholesale services; identification of barriers to competition; price squeeze
analysis; LLU options; price benchmarks; define reference interconnect offers; duct access; leased line services, benchmarking;
retail-wholesale margins; market trends; international capacity costs and prices especially for island economies; regulatory
strategies; broadband benefits; access network costs and technologies.
Current cost accounting
As part
of many cost models, the existing asset base will need to be re-valued to reflect the current asset values and the
modern equivalent asset (MEA). Various CCA methods and tools can be used. One of the possible approaches
is a new Fixed Asser Register that adds to the historic accounts and enables every individual asset to be re-valued using
financial Capital Maintenance (FCM) methods. Disputes over the best approach and how to value historic assets are common,
especially when original records may be poorly maintained. CCA methods have been reviewed in recent Telzed work,
Due diligence
Investor due diligence
project are usually done within strict time limits. A range of specialist skills must combine to make the right
team and cover the financial, strategy, market, competition and business issues. Telzed can combine with a larger team
to give the specialised telco and regulatory skills required. With regulation being a key barrier and opportunity, this
is a risk area that needs a full understanding.
Telzed will not (normally) attempt to undertake the lead role in
a due diligence project, though Roger has led several specialised reviews.
Legal disputes, expert witness and arbitrations
Telzed can provide assistance where specialised telco industry experience and knowledge is required. Roger has acted
as expert witness and assisted in some major disputes. Work has included a major dispute over mobile termination prices
and types of interconnection agreement that may exist, plus a separate investigation of SMS "spoofing" where
a sender of a message can let the receiving party think the message came from another source. Recently Telzed provided
Expert Witness support to hearings that covered Access deficit and Universal service offers. An expert report was submitted
for lawyers that examined cost and process for sub-sea cables and how these should be defined; alternative bottom up costing
methods were also compared taking account of volume and cost changes over time.
Solving difficult problems
A
range of problems arise in all businesses and Telzed can assist where the problems are difficult to solve. Some samples
of the types of problem addressed in the past include:
How to negotiate an interconnection agreement?
Should a cable
TV and fixed telco business also become a MVNO?
How to accurately determine the traffic over a fibre cable, up to 10
years in the past, when no measurements were made at the time?
Should a government continue to take critical telco
services from an international carrier after it had gone bankrupt and emerged from the "firesale?"
Define the
marginal cost for 3G mobile data services. What should be the minimum retail price for data services?
How
to define a solution for pricing global services that is acceptable to both the supplier and the buyer, when the 100M$ per
year deal had gone sour?
How to define "Fixed," "Mobile" and "Data" etc. business service
costs and accounts when the networks are fully integrated and were never separate? What to do when most of the
network is sharing a single IP network platform?
Should a GSM operator agree to a request from a prospective MVNO?
Linking Telzed to other services
Telzed provides many years
of experience examining telecom costs and profits to help with business management, pricing, KPIs, regulatory controls, due
diligence etc. This work is vital to set sensible prices and to manage a business properly (though some telcos still
avoid doing it properly). Telzed appreciates that further benefits can be obtained if costing work is linked to customer
revenue optimisation and churn analysis. A consulting proposition paper is now available to download (see below) that
describes the benefits and main features of the work. This also shows how telcos can benefit from using Telzed with other
experts. Telzed is able to work with many other experts and firms.
Click here for pdf file on revenue optimisation and costing
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