Review of multiple drafts of a new, complex fixed LRIC model developed by the telecoms regulator

The problem

• Our client, an incumbent network owner, sought support in the review of a new LRIC model of fixed network infrastructure being developed by the telecoms regulator for their country, this was intentionally released as multiple drafts for consultation during the regulatory process
• Our client also sought support regarding certain conceptual issues, including the implementation of economic depreciation in the model

The solution

• For each consultation, our review was conducted over a compressed period (3-4 weeks) and included a detailed assessment of both the model calculations and the underlying geographical analysis
• We wrote a report setting out our concerns in the modelling approach for submission to the regulator with detailed justifications, including quantitative evidence generated from the model itself e.g.
  • maps of the implied network and how it compares to road infrastructure
  • cross-checks and sanity-checks of input assumptions
  • charts of model outputs to illustrate inconsistencies
• Where possible, we also identified the specific location of errors, including:
  • input cells and formulas in the Excel model 
  • lines of code in the underlying geographical analysis (implemented in an open-source software package)
• We worked collaboratively with our client’s internal modelling experts to add value and expertise to the collective model review through our expertise, including on the implementation of economic depreciation and the underlying geographic analysis

Figure: Street-by-street plots of the modelled access network, illustrating gaps in the deployment

The result

• Numerous improvements were made to the models and documentation as a result of our feedback, with the modelled costs better reflecting the realistic, efficiently-incurred costs of domestic fixed network deployment