20-07-2012, 09:48 AM
Charging plans
[attachment=28121]
Introduction
Providing a telecommunication service calls for investment in capital items as well as meeting operational expenses
The CAPITAL COST includes that of line plant, switching systems, buildings and land.
OPERATING COSTS include staff salaries, maintenance costs, water and electricity charges.
SHARED RESOURCES
The cost of shared resources like the switching equipment is amortised among a large number of subscribers over a period of time.
DEDICATED RESOURCES
The cost of dedicated resources like the telephone instrument and the subscriber line must be recovered from individual customers.
Recovery of Costs
A subscriber’s share of the capital costs of the common resources is generally covered in the initial connection charge and the rental component.
Certain operating costs are incurred even if the network carries no traffic. These are covered by rental.
Charges for the individual calls include the operating costs in establishing and maintaining the calls, and a component for the capital resources used.
Technical Progress
The technical progress in trunk transmission has resulted in significant cost reductions in trunk networks.
However, the local network services still continue to be expensive.
The subscribers are given reasonable tariff structures for both local and long distance services .
The revenue and tariff structures are also governed by marketing policies and government regulation.
How is charging done?
Charging for individual calls is accounted for by using either a METERING INSTRUMENT connected to each subscriber line or a METERING REGISTER in case of electronic exchanges.
The count in the meter represents the number of charging units.
A bill is raised by assigning a rate to a charging unit.
The count is incremented by sending a pulse to the meter.
All the charging methods for individual calls fall under two broad categories
1.DURATION INDEPENDENT CHARGING.
2.DURATION DEPENDENT CHARGING.
FLAT RATE TARIFF SYSTEM
This system was adopted by some administrations to avoid the capital cost of providing meters and the operating costs of reading them at regular intervals and preparing the bills.
In flat rate tariff system some fixed charges for an estimated average number of local calls are included in the rental. Its more beneficial to subscribers who make a large number of calls bur unfair to sparing users.
To reduce such disparity, business subscribers are charged a higher flat rate compared to domestic subscribers.
When flat rate charging is used, the subscribers naturally tend to make more calls which imposed higher traffic level on exchanges.
MODIFICATIONS IN FLAT RATE TARIFF SYSTEM
Some administrations combine the features of flat rate and call rate charging.
The rental covers a certain number of free calls per rental period and only calls above this number are charged for. INDIA uses this scheme. This method is usually adopted from marketing angle.
This scheme offers no particular advantage in terms of reducing the capital of operating costs.
As the advent of technology flat rate charging is likely to be discarded soon.
Duration dependent charging
A periodic train of pulses from a common pulse generator operates the calling subscriber’s meter at appropriate intervals. This is called periodic pulse metering .
The traffic carried by a network varies throughout the day.
A large part of the hardware of the network remains idle during offpeak hours and gets loaded during peak busy hour.
In order to restrict the peak demand and encourage offpeak demand, it is common to make the metering rate vary with the time of day.
This is implemented by changing the pulse repetition frequency under the control of time- of- the- day clock.
[attachment=28121]
Introduction
Providing a telecommunication service calls for investment in capital items as well as meeting operational expenses
The CAPITAL COST includes that of line plant, switching systems, buildings and land.
OPERATING COSTS include staff salaries, maintenance costs, water and electricity charges.
SHARED RESOURCES
The cost of shared resources like the switching equipment is amortised among a large number of subscribers over a period of time.
DEDICATED RESOURCES
The cost of dedicated resources like the telephone instrument and the subscriber line must be recovered from individual customers.
Recovery of Costs
A subscriber’s share of the capital costs of the common resources is generally covered in the initial connection charge and the rental component.
Certain operating costs are incurred even if the network carries no traffic. These are covered by rental.
Charges for the individual calls include the operating costs in establishing and maintaining the calls, and a component for the capital resources used.
Technical Progress
The technical progress in trunk transmission has resulted in significant cost reductions in trunk networks.
However, the local network services still continue to be expensive.
The subscribers are given reasonable tariff structures for both local and long distance services .
The revenue and tariff structures are also governed by marketing policies and government regulation.
How is charging done?
Charging for individual calls is accounted for by using either a METERING INSTRUMENT connected to each subscriber line or a METERING REGISTER in case of electronic exchanges.
The count in the meter represents the number of charging units.
A bill is raised by assigning a rate to a charging unit.
The count is incremented by sending a pulse to the meter.
All the charging methods for individual calls fall under two broad categories
1.DURATION INDEPENDENT CHARGING.
2.DURATION DEPENDENT CHARGING.
FLAT RATE TARIFF SYSTEM
This system was adopted by some administrations to avoid the capital cost of providing meters and the operating costs of reading them at regular intervals and preparing the bills.
In flat rate tariff system some fixed charges for an estimated average number of local calls are included in the rental. Its more beneficial to subscribers who make a large number of calls bur unfair to sparing users.
To reduce such disparity, business subscribers are charged a higher flat rate compared to domestic subscribers.
When flat rate charging is used, the subscribers naturally tend to make more calls which imposed higher traffic level on exchanges.
MODIFICATIONS IN FLAT RATE TARIFF SYSTEM
Some administrations combine the features of flat rate and call rate charging.
The rental covers a certain number of free calls per rental period and only calls above this number are charged for. INDIA uses this scheme. This method is usually adopted from marketing angle.
This scheme offers no particular advantage in terms of reducing the capital of operating costs.
As the advent of technology flat rate charging is likely to be discarded soon.
Duration dependent charging
A periodic train of pulses from a common pulse generator operates the calling subscriber’s meter at appropriate intervals. This is called periodic pulse metering .
The traffic carried by a network varies throughout the day.
A large part of the hardware of the network remains idle during offpeak hours and gets loaded during peak busy hour.
In order to restrict the peak demand and encourage offpeak demand, it is common to make the metering rate vary with the time of day.
This is implemented by changing the pulse repetition frequency under the control of time- of- the- day clock.