STEM help / Calculation framework

10.3.29 Service administrative costs

Each cost input is interpreted as the cost associated with one connection to the Service in its Calibration Period. The cost in other years is governed by the relevant global Cost Trends – see 10.3.7 Cost Trends and Age Factors.

Administration Cost

The ongoing administration cost per period (as defined by the Cost Period input) for each connection to a Service, independent of Resources used, e.g., the cost of billing customers.

Provision Cost

The one-off cost of providing a new connection to a Service, independent of Resources used (e.g., assigning a number, setting up billing), arising from all new connections to a Service, including those caused by churn – see 10.3.2 Churn.

Cost Period

Defines a reference period for recurring cost inputs such as Maintenance Cost, Administration Cost or Operations Cost (which are interpreted as cost per cost period, such as EUR per month or USD per annum). This indicates how the cost input should then be scaled in proportion to the length of the current period for calculation.

Cost Allocation

Administrative Costs can be fed back to contribute to the calculation of Cost Dependent Tariffs. The respective proportions of these costs to be recovered from the Connection, Rental and Usage Tariffs are specified in the Service Cost Allocation dialog. By default, the Administration Cost is recovered wholly from the Rental Tariff, and the Provision Cost from the Connection Tariff.


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