National RCN & RCNLD Models

Valuation and Appraisal

Jun 28, 2018

Client:   AT&T, Verizon, Frontier

Staff:     Luis Rodriguez, Charlie Burkhardt, Bob Garringer

Date:     2018

Model:  CostQuest RCN Model

CostQuest provides Valuation and Appraisal support using widely accepted appraisal methods, including cost, sales and income based analysis.  Our strength lies in our ability to provide a clear cut understanding of the best approach for the specific situation, the ability to provide powerful analytics, and the ability to provide a fair and impartial valuation.  Our efforts have supported Mergers and Acquisitions, Financial Analysis, Insurance and Loan requirements, Regulatory efforts, Accounting and Tax needs.   As a key part of our service, we have access to, and team with, leading designated appraisers in the industry.

Our highly regarded Replacement Cost New (RCN) valuation model, index factors, and other related valuation services serve to help clients better understand and manage asset value.  As a widely accepted part of the valuation approach, Replacement Cost New (RCN) estimates the efficient cost of replacing an existing property with a similar property that has equal or greater functionality (or what is referred to as equal utility). CostQuest’s RCN addresses both the “efficient cost” and “equal utility” issues with a clear methodology, an impartial value story, and an approach that is flexible in how it mirrors your business rules.

What sets CostQuest apart is our use of detailed economic models.   For the wireline industry we actually engineer an efficient network to every service location, much like how an engineer would lay out the network.   For the wireless industry, we model each cell site, determine the equipment requirements, and apply the costs as incurred in the industry. 

In the end, CostQuest valuations typically produce a more defensible value than methods based solely on book costs. This is due to a number of factors found in our detailed approach, including that our RCN model eliminates ghost assets (i.e., non-working assets that may still remain on the books), and removes the overstated costs associated with multigenerational technology upgrades such as accumulated book investments associated with engineering, inspection, and permitting costs that build up over time.  Our model provides for an overall optimization of the network – as if the network were being built today.