The Application of Long Run Incremental Cost Model in the Jordanian Telecommunication Industry & its ability to Support the Financial Performance in these companies (Descriptive & Comparative Study: Jordanian Telecommunication Industry)

Abstract

This Article aims to show the efficiency of application of LRIC (Long Run Incremental Cost) Model in the JTI (Jordanian Telecommunication Industry) at the financial level, especially in the scope financial performance, and the role of the Telecommunications Regulatory Commission (TRC) in the application of this model, and the extent of cooperation that has occurred between the companies and this Commission.

This paper tries to highlights the legislations and the legal versions issued by Telecommunications Regulatory Commission and governmental entities and the extent of commitment the Jordanian Telecommunication companies by these legislations & Legal terms.

The study found a full compliance of these legislation and the regulations which issued by the Telecommunications Regulatory Commission by Jordanian telecommunications companies under study, Zain & Orange Telecom company, , as well as contribute to raising the level of financial efficiency on the financial performance scope. And the researchers found that the Zain Company witnessed an increasing Growth in the item of: Customers, Revenue, EBITDA or EBIT and Net Income after apply the LRIC model. Also the Gross Revenue had a negative Growth between the years 2010, 2011 and 2012. And there is an increasing in the capital expenditures between 2011 and 2012.

Keywords’: (LRIC) Long Run Incremental Cost, Telecommunications Regulatory Commission (TRC), Jordanian Telecommunication Industry (JTI), Jordan Mobile Telephone Services Company (Zain), Jordan Telecom Company (Orange).