Date: Sat, 22 Aug 1992 22:14:15 GMT
From: williamsk@gtephx.UUCP (Kevin W. Williams)
Newsgroups: comp.dcom.telecom
Subject: Re: What Does a CO Switch Cost?
Organization: gte
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X-Telecom-Digest: Volume 12, Issue 654, Message 5 of 10

In article <telecom12.638.6@eecs.nwu.edu>, hgschulz@gaia.cs.umass.edu
(Henning Schulzrinne) writes:

> Just curious: how much does a CO switch cost? I realize that this
> question is about as precise as asking "how much does a car cost", but
> I'm interested in any examples, be it a small rural switch or a large
> tandem switch. I'm trying to get some feeling for the costs of
> switching bandwidth.

A lot. Depending on size, configuration, trunking, features, etc.,
prices may vary by nearly 100%, but think several hundred dollars per
line for a switch operating near the design center for the switch.  I
doubt any manufacturer (including my employer) would be willing to
give detailed pricing schedules to anyone that wasn't actually
considering buying one, but there are features of pricing that are
fairly widespread in the industry:

1) A Base cost. This is the cost for the amount of hardware it
   would take to get the first line operational.

2) A per line cost. This is the price for each line added to the
   basic system.

3) Various per unit costs. Systems have growth increments where
   additional hardware must be added to expand the internal
   network size.

4) Office wide Right to Use fees. CLASS features are priced 
   this way by a number of makers: the telco has to pay a
   given price to offer CLASS services to subscribers.

5) Per Line right to use fees. A feature like Calling Number
   ID could be charged on a per line basis from the manufacturer
   to the telco.

6) Miscellaneous common equipment costs. How many biling tape
   drives does the site need? How many administrative terminals?
   How many little DC-AC inverters to power 110 VAC equipment
   from a -48V supply?

Depending on the market the maker is attempting to address, the ratio
between these costs will vary, and can frequently be tweaked around
for different sizes of office. If small line size switches are being
sold, the the base cost would tend to be small, and the per line cost
relatively high. If the target market is monster switches, the base
cost can be boosted pretty high, but the per line cost would be
lowered.

Features are sometimes priced with different options to a telco. An
office with only ten Centrex lines may choose to pay a per line
charge, while one with 25,000 Centrex lines may choose to pay a flat
rate that allows it to offer unlimited Centrex service (analogous to
per-processor software license and site-wide software license).

In general, the smaller the switch, the more it will cost when broken
down on a per-line basis.  A large urban area that uses switches with
100,000 lines only has to pay for one administration software package,
one center stage for the network, one of any number of things, but
gets to apply them to 100,000 lines. A mom-and-pop has to buy the
exact same things, but only gets to apply them to 2000 lines.  It is
quite a design and marketing juggle to figure out exactly how to
address a particular market size.


Kevin Wayne Williams
UUCP : ...!ames!ncar!noao!asuvax!gtephx!williamsk