All telecommunications service providers perform forecasting calculations to assist them in planning their networks. Accurate forecasting helps operators to make key investment decisions relating to product development and introduction, advertising, pricing etc., well in advance of product launch, which helps to ensure that the company will make a profit on a new venture and that capital is invested wisely. Why is forecasting used? Forecasting can be conducted for many purposes, so it is important that the reason for performing the calculation is clearly defined and understood. Some common reasons for forecasting include: Planning and Budgeting – Using forecast data can help network planners decide how much equipment to purchase and where to place it to ensure optimum management of traffic loads. Evaluation – Forecasting can help management decide if decisions that have been made will be to the advantage or detriment of the company. Verification – As new forecast data becomes available it is necessary to check whether new forecasts confirm the outcomes predicted by the old forecasts. Knowing the purpose of the forecast will help to answer additional questions such as the following: What is being forecast? – events, trends, variables, technology Level of focus – focus on a single product or a whole line, focus on a single company or the entire industry How often is forecasting conducted? – daily, weekly, monthly, annually Do the methods used reflect the decisions needed to be taken by management? What are the resources available to make decisions? – lead-time, staff, relevant data, budget, etc. What are the types of errors that could occur and what will they cost the company? Factors influencing forecasting When forecasting it is important to understand which factors may influence the calculation, and to what extent. A list of some common factors can be seen below: Technology subscriber access – fibre, wireless, wired, cellular, TDMA, CDMA, handsets application – telephony, PBXs, ISDN, videoconferencing, LANs, teleconferencing, internetworking, WANs technology – broadband, narrowband, carriers, fibre to the curb, DSL Economics Global Economics – Economic climate, predictions, estimates, economic factors, interest rates, prime rate, growth, management's outlook, investors' confidence, politics Sectoral Economics – trends in industry, investors’ outlook, telecommunications, emerging technologies growth rate, recessions, and slowdowns Macroeconomics – inflation, GDP, exports, monetary exchange rates, imports, government deficit, economic health Demographics Measurement of number of people in regions – how many were born, are living and died within a time period