STEM models represent the dynamic changes to a telecommunications network using an annual cycle repeated for a specified period.
The figure below summarises the cycle, showing how demand for Services is reflected in demand for capacity which is met by the installation of additional Resources (if any), taking into account the existing network, depreciation of plant and the deployment of Resources across the different Locations.
Newly installed Resources are costed according to their cost structure and the costs are allocated back to the Services which use them (if cost-based tariffs are being used). The calculated costs may be made to influence tariffs, which in their turn may influence demand as the cycle is repeated for the following year.
The STEM calculation cycle