Service cost model and cost comparative studies

Carmen Mas Machuca (Senior researcher and lecturer at Munich University of Technology, Munich, Germany)
Øyvind Moe (Strategic advisor at Telenor, Fornebu, Norway)
Joerg Eberspächer (Based at the Munich University of Technology, Munich, Germany)
Monika Jaeger (Senior consultant at T‐Systems, Berlin, Germany)
Andreas Gladisch (Head of department NGN, T‐Systems, Berlin, Germany)


ISSN: 1463-6697

Publication date: 8 May 2009



The purpose of this paper is to propose a service cost model which can be used to evaluate the impact of different management functionalities or network platforms to the service cost.


Following the validation of the importance that OpEx has on the overall TCO, a classification of the costs is proposed, based on their relation to the network. Two main types of costs have been identified: network based costs and service based costs. Both cost types have been modeled as a set of interconnected processes based on the network and service life cycle respectively. Network and service cost models have been integrated into a single framework. These models have been implemented as Markov chains, which include the dynamic behavior of services. Two different methods for the implementation (analytical versus non‐analytical) have been compared from the implementation and computation time point of view. The proposed service model has been used in two case studies: cost comparison of different types of services on different platforms; and impact of the service type distribution on the overall service cost on different platforms.


This paper finds the utility that the proposed cost model has. It has been shown that the impact on the overall service cost that a particular network platform capability such as the possibility of establishing point to multipoint connections has.. The proposed network and service cost models can be used on different types of networks and services.


The paper presents a general service cost model that can be used to study the impact of any management functionality or network platform has on the service cost.



Mas Machuca, C., Moe, ., Eberspächer, J., Jaeger, M. and Gladisch, A. (2009), "Service cost model and cost comparative studies", info, Vol. 11 No. 3, pp. 19-30.

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