Interconnect Cost Modelling, Interconnect Agreements and RIO

Interconnect is one of the largest single elements of both revenues and costs and yet often receives little focus within an organisation outside of the regulatory function.

Modelling the cost of call termination and other interconnect (access) services is a contentious issue. While a model suggests mathematical certainty and accuracy, in fact model design, inclusion or exclusion of certain costs, the weighted average cost of capital and many other factors are subject to discussion. Knowing what factors are most relevant and how to influence or “game” the outcome are an essential part of regulatory cost modelling.

Coleago’s consulting team have supported operators and regulators in more than 20 countries as they have gone through the process of introducing cost based interconnect or needed to respond to a regulator drive interconnect rate reduction proposal, notably mobile termination rates (MTR).

Coleago’s consulting team has carried out regulatory cost modelling projects for operators and regulators in Europe and elsewhere, including Malaysia, Jersey, Malta, Thailand, Belgium, Ireland, Poland, Cyprus, Italy, Mozambique, and South Africa using different methodologies (historic costs, current costs, forward looking costs, LRIC, TELRIC, TSLRIC, FAHC, FACC).

Our suite of existing interconnect cost models accelerate the modelling process and thus leave room to optimise the outcomes. For mobile operators in particular, knowing how to tune the model is key to obtaining higher interconnect rates.


Stefan Zehle

T: +44 7974 356 258

Graham Friend

T: +41 79 855 1354