Time-Driven Activity-Based Costing In Telecommunication Industry

Telecom operators have to improve their costs calculation and management solutions, for the much more fiercely competitive market, the growth rate of data revenue does not accord with that of data traffic and the impact of mobile internet era. Telecom operators can easily realize the purposes through the implementation of the time-driven activity-based costing (TDABC). What is more, TDABC can help telecom operators to master the production capacity especially the idle resources situation so as to improve the efficiency and effectiveness of resource utilization. Therefore, it is of great significance to research how to implement TDABC in telecommunication industry.This paper firstly introduces the TDABC relevant theory and then analyzes the implementation of ABC in telecommunication industry. The conclusion of these is that TDABC can better accommodate to the requirements of telecom operators’cost management and control than ABC.Secondly, this paper explains the implementation of TDABC in telecom operators in detail. The TDABC model of telecom operators is divided into two parts which are the network model used for network costs allocations and the business model used for non-network costs allocations. Furthermore, the costs on each part of the model are then divided into fixed costs and variable costs according to cost behavior. Fixed costs are allocated to cost objectives based on the resource availability and the resources consumption characteristics, while the variable costs are directly traced to the cost objective. In addition, the paper introduces the possible further applications of TDABC in telecommunication companies. The paper also gives some advices of the problems may be encountered when implementing TDABC in telecom operators, including how to analyze and manage the idle resources and how to improve the efficiency and effectiveness of TDABC implementation.Finally, the last part of this paper sums up the conclusions and makes an objective evaluation of the designed model and summary of the inadequacies of the model to improve and new program ideas.