Forecasting Capital Investment for Fixed-Telephony Network Switching Equipment in Tandem with NGN Migration Using Cobb-Douglas Model

This paper tries to estimate the capital investment required for the fixed-telephony network switching equipment as demanded by the fourth national development plan. As a first step, the Cobb-Douglas model is used as a successful demand forecasting model to estimate the demand over the target years. Then, an architectural plan is developed for the fixed-telephony switching network that takes into account the expansion of the existing exchanges as well as the addition of new ones. The number of the required ports in local exchanges, the intercity traffic (including cell phone subscribers), and the required trunks in transit exchanges are then estimated. Two scenarios are used to estimate the investment needed: expanding legacy network (circuit-based), and NGN adoption (a combination of circuit and packet-based networks). Finally, conventional pricelists from different local and foreign suppliers are used to arrive at two total investment estimates: 6,013 billion Rials and 6330 billion Rials for the two mentioned scenarios, respectively.