tworks, their structure, and functionality; we also introduced network management, which network operators use to improve the performance of their networks and to maintain their network in an effective way. Telecommunications net- work operators who build up and maintain their network have to provide good performance service at as low an investment level as possible if they are to be competitive. Their problem is how to minimize investment but still keep customers happy. To find out where they should invest and what the bottlenecks of the network are, they continuously perform traffic engineer- ing, which is introduced in the next section. 2.12 Traffic Engineering Traffic engineering is a key issue for telecommunications network operators trying to keep customers (subscribers) happy while minimizing network investments. Nowadays, network operators have to pay more and more attention to these aspects because of increasing competition in the telecom- munications services market. The capacity of the network (e.g., number of channels between exchanges, exchange sizes, number of radio channels in a cellular network) should be increased where the bottlenecks of the network are found. Therefore, the utilization of the network is continuously meas- ured and traffic demand in the future is estimated. Then, based on these esti- mates, the capacity of the network can be increased before severe problems occur. An important capacity planning method is based on theoretical analy- ses of capacity demand and introduction to these calculations is given next. 2.12.1 Grade of Service How happy subscribers are depends on the grade of service (GoS, availability or quality of the service) they receive. The GoS depends on the network capacity that should meet the service demand of the customers. Here we Introduction to Telecommunications Network Engineering analyze only GoS for circuit-switched service and the most important factor in our study is whether the call is successful or blocked. System faults, error rates, and other quality 