The complexity of Telecom cost management is one of the known concerns of the Telecom branche. Starting from a mixture of private and state-owned companies, it has grown into a liberated and highly dynamic industry.
The complexity of Telecom cost management: then and now
The current level of complexity of Telecom cost management has not always been this high. Don’t get it wrong, this industry has never been the simplest sector to manage costs in. However, it used to be a lot simpler. Yes, operations and networks were always large and came with some complexity, but operators only had voice-dominated landlines to manage. This has all changed. The market is more segmented, the number of offered services has expanded and customer demands are diverse. This causes a lack of awareness and transparency. Not to mention the need to be compliant with regulatory obligations.
Getting a grip on the complexity of Telecom cost management, the cost structure and performing actual cost and performance management has become a greater challenge over the last years, if not decades.
The complexity of Telecom cost management
The complexity of Telecom cost management revolves around three central themes:
Managing different plans, systems, campaigns and promotions, raises the complexity of telecoms’ cost management.
Telecom organizations are big, and with every product, service and technological breakthrough, they only become bigger. The challenge: maintaining simplicity.
On top of running the business, Telecom organizations need to answer to regulators’ obligations. Different regulators have different demands.
Dealing with the complexity of Telecom cost management
In Telecom, several cost standards need to be calculated. For example, Fully Allocated Cost (FAC), Long Run (Average) Incremental Costs (LR(A)IC), Pure-(LR(A)IC) plus Markup and Stand-alone Costs (SAC). This requires up to more than 10 layers in a cost model. How to deal with this complexity? You find out here.