Cost optimization methods in the design of next generation networks

A key development of telecommunication systems during the past two decades has been the evolution from the circuit-switched network toward the packet-switched network paradigm. Many operators are now migrating their PSTNs from circuit switched networks. This new approach is often called the next-generation network NGN enables network operators to run all services (i.e., voice, data and video) on one network. In this article the migration of Iceland Telecom's circuit-switched PSTN towards NGN is described. A cost model of the telecommunications system has been developed to enable cost and benefits analysis of transforming the network to NGN. Methods of optimization and their application to determine the optimal number and position of nodes in the future network are described. The optimization produces a network structure with the lowest possible total cost of ownership, and the model can also indicate how deviations from the optimum affect cost. The feasibility of NGN is assessed by comparing the cost of NGN migration to that of maintaining the current circuit-switched network.