Some ideas regarding economics of telecommunications engineering

On the premise that telecommunications engineering may be considered one of the most complex and highly technical industries, more than usually dependent upon engineering, the author considers the economics of the subject from the viewpoint of the interdependence of service, money and technology. The paper is based upon experience obtained with private operating and manufacturing organisations. It is considered that sound and profitable engineering should be based on a certain "critical ratio". This ratio should be a maximum for so long as anyone can conceive and is defined as the difference between revenue and expense expressed as a ratio of investment. This is developed in the article by way of a practical example giving separate consideration to each of the terms constituting the critical ratio. The economics of expanding, or growth networks, are considered in terms of the latest technical developments. From the equipment point of view it is considered advantageous to allow customers to have a choice from among a number of optional availabilities provided that he is willing to pay. Money ranks equally with technology as a primary consideration in telecommunications engineering and is of critical importance to the health of any enterprise. In an appendix the author considers the question of depreciation concluding that the engineers' basic interest in this is in the manner in which it affects the critical ratio.