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"Further information consisting of a paper on equity beta estimation prepared by The Brattle Group on behalf of Ofcom and an updated version of the cost model used to determine the economic cost of mobile call termination is available below."

RESPONSE TO CRITICISM OF “ISSUES IN BETA ESTIMATION FOR UK MOBILE OPERATORS: UPDATE, DECEMBER 2003" (PDF, 279Kb)
LRIC model (.zip, 4.8Mb)

LRIC model

The updated version of the model reflects amendments to the April 2002 LRIC model as documented in the Wholesale Mobile Voice Call Termination consultation published 19 December 2003 and statement published 1 June 2004.

A number of amendments have been made to the Netw_R2.xls file (no changes have been made to either the Econ_R2.xls or HCACCAR2.xls files). These amendments concern:

• value of the cost of capital;
• treatment of 32Mbit/s BSC-MSC links;
• treatment of 2Mbit/s and 8Mbit/s microwave links;
• MSC call related routing factors;
• 2G spectrum pricing;
• treatment of equipment that declines in quantity.

An additional file (Reconciliation.xls) shows the derivation of the efficient charge level resulting from comparison with the MNOs' cost information.

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