In the telecommunication industry, estimation of the cost of network facilities is very important since depreciation cost of the facilities accounts for a large portion of the product cost. Moreover, cost estimation in the industry becomes more difficult because of increasing indirect cost upon digital convergence, expanding multi-purpose facilities, complexity of service product, etc. Nevertheless, not much seem to have been done in improving estimation methodology of the cost of network facilities. As a result, the quality of cost information on network facilities has deteriorated, and now even decision-makers in the industry dismiss the information. Recently, two major telecommunication companies adopted a new network cost estimation method to deal with the issue. In this paper, we study the concept of new cost estimation method and the procedure to develop and apply it. We also suggest the method to carry out the cost allocation using Matlab which is more efficient and time-saving than other commercial cost calculation packages.