ISDN Basic vs. Frame Relay (128Kbps)
A Cost Comparison
ISDN basic and frame relay are positioned to compete with each other for a segment of the market with bandwidth requirements on the order of 128Kbps. An analysis of the net present value of the tariff expenditures in the first year provides a starting point for firms deciding between the two technologies.
Comparisons were based on one-time installation costs, monthly recurring costs, and usage costs. We received the tariff information for ISDN basic from Bell Atlantic; the frame relay information was publicly available on Pacific Bell's homepage on the WWW.
Our results show that depending on the expected usage, in minutes per month, a company will be getting a better deal with one or the other service. This results from the fact that ISDN basic service imposes a $.05 per-minute fee over the monthly service tariff. Frame relay, on the other hand, charges a flat rate.
The following graph shows the break-even point, in terms of usage, at which the higher frame relay tariff becomes competitive with ISDN Service.
The break-even point, in terms of monthly usage, is approximately 4,900 minutes. If a company expects higher usage rates than this, frame relay will provide a more affordable solution. If usage rates are expected to be lower that 4,900 minutes/month, ISDN, with its lower monthly tariff will be more affordable.
Cost Analysis