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TRIBAN WorkshopTRIBAN WorkshopTomorrow’s Residential Infrastructure for Tomorrow’s Residential Infrastructure for
Broadband And NarrowbandBroadband And Narrowband
Techno-Economic Evaluation of Techno-Economic Evaluation of Broadband Radio Access Solutions Broadband Radio Access Solutions
Valter Benedetto
E-Mail: [email protected]
OutlineOutline
• EURESCOM framework
• Techno-economic analysis – Objectives
– Methodology
• P614 basic assumptions
• Investment analysis
• Sensitivity analysis
• Conclusions
EURESCOM FrameworkEURESCOM Framework
• EURESCOM is the Institute for Research and Strategic Studies in Telecommunications
• EURESCOM Projects related to the access network- Pre-studies (1992)
- P306 “Access network evolution and preparation for implementation” (1993-1994)
- P413 T2 “Optical networking in the local loop” (1994-1996)
- P614 “Implementation strategies for advanced access networks” (1996-1998)
• P614/PIR 6.3: Techno-economic evaluation of broadband radio access solutions
Techno-Economic Analysis - ObjectivesTechno-Economic Analysis - Objectives
• Objectives– Analyse and compare different scenarios and network
architecture solutions
• Means– Cost evaluation
• Investment
• OAM costs
• Depreciation
– Revenue estimation– Analysis of critical parameters and evaluation of their influence
on the economic results– Risk analysis
Technical features
Techno-Economic Analysis - Methodology Techno-Economic Analysis - Methodology
Volumes Calculation
EconomicCalculation
EconomicResults
Performance
Services Cost Data Base
Scenario definition
Scenario DefinitionScenario Definition
• Service scenario definition
• Network architecture definition
• Network design
• Network evolution strategy
• Miscellaneous parameters
Service Scenario DefinitionService Scenario Definition
• Selection of services to be supplied
• Penetration curves for each service
• SSB/ASB ratio definition
• Return channel bit rate for ASB services
• Envisaged traffic
• Annual revenue
• Taxes
BASESTATION
BASESTATION
CENTRALSTATION
ISDN / PSTNLocal
Exchange
Deployment ScenarioDeployment Scenario
Network Architecture DefinitionNetwork Architecture Definition
• Depends on:– Radio equipment features– Services to be supplied – Structure of the feeder network
• Aims at the definition of the network components required for the desired scenario– Radio (BS and TS)– Interfaces (NNI, UNI)– Feeder link– Etc.
Radio Network DesignRadio Network Design
• Coverage structure definition
• Trade-off between available spectrum and required
capacity
• Definition of radio resource allocation strategies
• Estimation of the maximum achievable radio range
• Verification of availability objectives
• Minimization of infrastructure and equipment
volumes
• Estimation of passed customer percentage
Equipment and Infrastructure Volume Equipment and Infrastructure Volume CalculationCalculation
V1
V2
V3
V4
P1 P2 P3 P4 P5
S1 S2 S3
Ne
two
rk E
lem
en
tsN
etw
ork
Pa
ram
ete
rsS
erv
ice
s
V5
Volumes - affecting parametersVolumes - affecting parameters
Capacity per Equipment
Spectrum Availability
Service Penetration
Required Traffic
Maximum Radio Range
Passed Customers %
CapacitySupplied Capacity
Cost Component Data BaseCost Component Data Base
INF
R.
P-P
LM
DS
P-M
P
Cost ComponentCost ComponentData BaseData Base
• Price evolution• Type of component• Depreciation period• MTBF (Mean Time Between
Failure)• MTTR (Mean Time To
Repair)• Maintenance class
Economic CalculationEconomic Calculation
ServiceDefinition
Tariffs OrographyUser Density
Equipment Volumes Infrastructures Volumes
InvestmentRevenues
DepreciationTaxes
Costs
OAM
Cash flow
Financial Indexes
VAN TIR
Payback ROI
...Inv/User
NetworkArchitecture
NetworkEvolution
Scenario DescriptionScenario Description
SpectrumAvailability
AvailabilityObjectives
SystemFeatures
P614 Basic Assumptions - Service ScenarioP614 Basic Assumptions - Service Scenario
• Deployment Area– Downtown
– Urban
– Suburban
– Rural
• Services– 2 Mbit/s SSB/ASB
– 8 Mbit/s SSB/ASB
– 26 Mbit/s SSB/ASB
• SSB/ASB ratio– 80/20 Downtown
– 30/70 Urban
– 20/80 Suburban
– 20/80 Rural
• Return channel for ASB– 64 kbit/s for 2 Mbit/s
– 128 kbit/s for 8 Mbit/s
– 2 Mbit/s for 26 Mbit/s
Broadband penetration, unequal distribution final year
0,00 %
5,00 %
10,00 %
15,00 %
20,00 %
25,00 %19
98
1999
2000
2001
2002
2003
2004
2005
2006
2007
Year
Bro
adb
and
pen
etra
tio
n
2 Mbit/s
8 Mbit/s
26 Mbit/s
Total BB
P614 P614 BBasic Assumptions - Service Scenarioasic Assumptions - Service Scenario
P614 Basic AssumptionsP614 Basic Assumptions Network Architecture Network Architecture
• Deployed systems– LMDS: downtown and urban areas– Symmetric P-MP: suburban and rural areas– P-P DRRS
• Frequency bands– LMDS: 40 GHz– Symmetric P-MP: 10.5 GHz– P-P DRRS: 38 GHz
• Spectrum availability– LMDS: 400 MHz downstream and 80 MHz upstream – P-MP: 56 MHz for both downstream and upstream
• Supplied capacity– LMDS: 46 Mbit/s downstream and 2 Mbit/s upstream– Symmetric P-MP: 10 Mbit/s both for downstream and upstream
P614 Basic AssumptionsP614 Basic AssumptionsNetwork ArchitectureNetwork Architecture
Service AccessFeederLEX
LocalExchange
Service Access Point(Base Station)
Building
Customer Premises
Toservers
ADM
SDH RadioRing
DXC
PSTNExch. ATM
IWU
Up/Down
MOD/DEM
PC/Mux
2M ASB/SSB
Point Distr.
P-PDRRS
8 M SSB
MUX
MOD/DEM
8 M ASB
Set-top/PCUp/Down
P-PDRRS
26 M SSB
MUX
ADM
DXCMODDEM
UpDown
Antenna Unit
P-PDRRS
IWU
P-PDRRS
MOD/DEM
26 M ASB
Up/Down
IWU
IWU
Set-top/PCIWU
P614 Basic AssumptionsP614 Basic Assumptions Radio Network Design Radio Network Design
• Selection of two coverage structures• C/I estimation • Evaluation of power threshold degradation • Calculation of the maximum radio range with 99.97%
availability
DV
AV
CV
BV
DV
CH
CH
AV
AV
BH
BH
AH AH
DH
DH
AH
AH
BH BH
CH
CHDH
DH
CV
CV
AV
BV
BV
BV
DV
DV
CV
AH
AH
AH
AH
BH
BH
BH
BHAV
AV
AV
AV BV
BV
BV
BV
P614 Basic Assumptions P614 Basic Assumptions Radio Network EvolutionRadio Network Evolution
AV
AV
AV
AV
BVBV
BV
BV
CV
CV
CV
CV
DV
DV
DV
DV
AH
AH
BHBH
CH
CH DH
DH
AH AH
BH
BH
CH
CH
DH
DH
AH
CH
CH
DH
BH
BHAV
AVBV
BV
CVDV
DV
AH
DHCV
AH
BH
CH
DH
DV
CV
AV
BV
time
• Aims at the definition of the time evolution of the radio network during the study period
• Two strategies have been selected– Four frequencies strategy– Two frequencies strategy
• Objective: investigate the impact on the investment
Investment AnalysisInvestment Analysis
• Cumulated and net investment for each year
• Investment per user for each year
• Investment breakdown for class of components
• Line cost breakdown
• Analysis with reduced set of services
• Comparison between the selected network upgrading
strategies
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
5 000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year
Cu
mu
l. I
nve
stm
ent
[kE
UR
O]
Downtown
Urban
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
5 000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year
Cu
mu
l. I
nve
stm
ent
[kE
UR
O]
Downtown
Urban
200
400
600
800
1 000
1 200
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year
Net
In
vest
men
t [k
EU
RO
]
Downtown
Urban
200
400
600
800
1 000
1 200
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year
Net
In
vest
men
t [k
EU
RO
]
Downtown
Urban
LMDS Systems LMDS Systems Cumulated and Net InvestmentCumulated and Net Investment
LMDS Systems - Investment per UserLMDS Systems - Investment per User
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year
Inve
stm
ent
per
Use
r [E
UR
O]
Downtown
Urban
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year
Inve
stm
ent
per
Use
r [E
UR
O]
Downtown
Urban
0
100
200
300
400
500
600
700
800
900
1000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year
Inve
stm
ent
[kE
UR
O] DRRS
BS
Sites
NT
TS 8 Mbit/sSSBTS 26 Mbit/sSSB
0
100
200
300
400
500
600
700
800
900
1000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year
Inve
stm
ent
[kE
UR
O] DRRS
BS
Sites
NT
TS 8 Mbit/sSSBTS 26 Mbit/sSSB
0
500
1000
1500
2000
2500
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year
Inve
stm
ent
[kE
UR
O] DRRS
BS
Sites
NT
TS 8 Mbit/sSSBTS 26 Mbit/sSSB
0
500
1000
1500
2000
2500
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year
Inve
stm
ent
[kE
UR
O] DRRS
BS
Sites
NT
TS 8 Mbit/sSSBTS 26 Mbit/sSSB
LMDS Systems - Investment Breakdown LMDS Systems - Investment Breakdown for Class of Componentsfor Class of Components
DowntownDowntown
UrbanUrban
LMDS Systems - Line Cost BreakdownLMDS Systems - Line Cost Breakdown
0100020003000400050006000700080009000
1000011000
2 Mbit/sASB
2 Mbit/sSSB
8 Mbit/sASB
8 Mbit/sSSB
26 Mbit/sASB
26 Mbit/sSSB
Capacity provided
Inve
stm
ent
per
Use
r [E
UR
O]
TS
Distribution
Feeder
0100020003000400050006000700080009000
1000011000
2 Mbit/sASB
2 Mbit/sSSB
8 Mbit/sASB
8 Mbit/sSSB
26 Mbit/sASB
26 Mbit/sSSB
Capacity provided
Inve
stm
ent
per
Use
r [E
UR
O]
TS
Distribution
Feeder
0100020003000400050006000700080009000
1000011000
2 Mbit/sASB
2 Mbit/sSSB
8 Mbit/sASB
8 Mbit/sSSB
26 Mbit/sASB
26 Mbit/sSSB
Capacity Provided
Inve
stm
ent
per
Use
r [E
UR
O]
TS
Distribution
Feeder
0100020003000400050006000700080009000
1000011000
2 Mbit/sASB
2 Mbit/sSSB
8 Mbit/sASB
8 Mbit/sSSB
26 Mbit/sASB
26 Mbit/sSSB
Capacity Provided
Inve
stm
ent
per
Use
r [E
UR
O]
TS
Distribution
Feeder
DowntownDowntown
UrbanUrban
LMDS Systems - Investment per User LMDS Systems - Investment per User with Reduced Set of Serviceswith Reduced Set of Services
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year
Inve
stm
ent
per
Use
r [E
UR
O]
P-P & LMDS
LMDS
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year
Inve
stm
ent
per
Use
r [E
UR
O]
P-P & LMDS
LMDS
1 000
2 000
3 000
4 000
5 000
6 000
7 000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year
Inve
stm
ent
per
Use
r [E
UR
O]
P-P & LMDS
LMDS
1 000
2 000
3 000
4 000
5 000
6 000
7 000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year
Inve
stm
ent
per
Use
r [E
UR
O]
P-P & LMDS
LMDS
DowntownDowntown
UrbanUrban
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year
Inve
stm
ent
per
Use
r [E
UR
O]
Four frequencies
Two frequencies
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year
Inve
stm
ent
per
Use
r [E
UR
O]
Four frequencies
Two frequencies
LMDS Systems - Comparison between LMDS Systems - Comparison between Network Upgrading StrategyNetwork Upgrading Strategy
P-MP SystemsP-MP SystemsCumulated and Net Investment Cumulated and Net Investment
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year
Cu
mu
l. I
nve
stm
ent
[kE
UR
O]
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year
Cu
mu
l. I
nve
stm
ent
[kE
UR
O]
100
200
300
400
500
600
700
800
900
1 000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year
Net
In
vest
men
t [k
EU
RO
]
100
200
300
400
500
600
700
800
900
1 000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year
Net
In
vest
men
t [k
EU
RO
]
P-MP Systems - Investment per UserP-MP Systems - Investment per User
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year
Inve
stm
ent
per
Use
r [E
UR
O]
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year
Inve
stm
ent
per
Use
r [E
UR
O]
0
1000
2000
3000
4000
5000
6000
7000
8000
2 Mbit/sASB
2 Mbit/sSSB
8 Mbit/sASB
8 Mbit/sSSB
26 Mbit/sASB
26 Mbit/sSSB
Capacity provided
Inve
stm
entp
er u
ser
[EU
RO
] TS
Distribution
Feeder
0
1000
2000
3000
4000
5000
6000
7000
8000
2 Mbit/sASB
2 Mbit/sSSB
8 Mbit/sASB
8 Mbit/sSSB
26 Mbit/sASB
26 Mbit/sSSB
Capacity provided
Inve
stm
entp
er u
ser
[EU
RO
] TS
Distribution
Feeder
P-MP Systems - Line Cost BreakdownP-MP Systems - Line Cost Breakdown
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year
Inve
stm
ent
per
Use
r [E
UR
O]
P-P & P-MP
P-MP
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year
Inve
stm
ent
per
Use
r [E
UR
O]
P-P & P-MP
P-MP
P-MP Systems - Investment per User P-MP Systems - Investment per User with Reduced Set of Serviceswith Reduced Set of Services
Summary of the Investment AnalysisSummary of the Investment Analysis
• Downtown area– Average cost per line: 4500 EURO with LMDS & P-P
– Average cost per line: 1600 EURO with LMDS only
• Urban area:– Average cost per line: 2400 EURO with LMDS & P-P
– Average cost per line: 1300 EURO with LMDS only
• Suburban and rural area– Average cost per line: 4500 EURO with P-MP & P-P
– Average cost per line: 3000 EURO with LMDS only
Sensitivity AnalysisSensitivity Analysis
• Sensitivity of the economic results to network parameters
• Simultaneous analysis of different scenarios• Sensitivity of economic results to:
– Financial parameters (taxes, …)– Service parameters (penetration, revenue, …)– Cost components (price, maintenance, operation, ...)– Network parameters (spectrum, traffic, ...)
• Useful to find out the critical network parameters
2 000
2 100
2 200
2 300
2 400
2 500
2 600
2 700
2 800
20% 10% 0% -10% -20%Price Variation
Inve
stm
ent
per
Use
r [E
UR
O]
TS
BS
DRRS
2 000
2 100
2 200
2 300
2 400
2 500
2 600
2 700
2 800
20% 10% 0% -10% -20%Price Variation
Inve
stm
ent
per
Use
r [E
UR
O]
TS
BS
DRRS
3 500
3 700
3 900
4 100
4 300
4 500
4 700
4 900
5 100
5 300
20% 10% 0% -10% -20%Price Variation
Inve
stm
ent
per
Use
r [E
UR
O]
TS
BS
DRRS
3 500
3 700
3 900
4 100
4 300
4 500
4 700
4 900
5 100
5 300
20% 10% 0% -10% -20%Price Variation
Inve
stm
ent
per
Use
r [E
UR
O]
TS
BS
DRRS
LMDS Systems - Sensitivity AnalysisLMDS Systems - Sensitivity Analysis
UrbanUrban
DowntownDowntown
P-MP Systems - Sensitivity AnalysisP-MP Systems - Sensitivity Analysis
3500
3600
3700
3800
3900
4000
4100
4200
4300
4400
20% 10% 0% -10% -20%Price Variation
Inve
stm
ent
per
Use
r [E
UR
O]
TS
BS
DRRS
3500
3600
3700
3800
3900
4000
4100
4200
4300
4400
20% 10% 0% -10% -20%Price Variation
Inve
stm
ent
per
Use
r [E
UR
O]
TS
BS
DRRS
ConclusionsConclusions
• A methodology for carrying out technical and economic analysis of radio access network has been described
• The definition of the service/network scenario requires an accurate design and dimensioning of the radio network
• Investment analysis has pointed out the relationship between cost per line and the scenario
• Equipment cost uncertainty can be handled by means of sensitivity analysis
• Equipment cost reduction is required for radio to provide very competitive solutions for broadband services. The definition of an emerging standard may speed up this trend
