The Telecommunications Regulatory Authority (TRA) hosted a presentation on the development and use of bottom-up fixed access, fixed core and mobile networks cost models in Bahrain.

The presentation aimed at helping the industry prepare its responses to the consultation document. Representatives from about 10 operators were present.

TRA chairman Dr Mohammed Al Amer said, "The development and use of bottom-up cost models will complement existing regulatory instruments in determining the fair and reasonable cost of retail and wholesale telecommunications services in Bahrain.

"They will also help gain a better understanding of the cost structure and the cost drivers of services.

"Having this additional tool in place will help the TRA review wholesale and retail prices to ensure that they meet legal requirements," Dr Al Amer said.

Bottom-up models use engineering rules combined with detailed costing and operational data to build efficient telecommunications networks, thereby identifying all components of the networks necessary to produce the required services.

This approach contrasts with "top-down" models which instead derive the cost of services based on operators' historical accounting information.

Bottom-up models better reflect the economic cost of services. From a regulator's perspective, the use of bottom-up models allows for greater transparency.

Such models enable sensitivity analysis of key variables. They can also be useful to assess the cost of new investments (such as new fibre deployments) or set cost efficiency targets.-TradeArabia News Service