1. TRIBAN Workshop Tomorrow’s Residential Infrastructure for Broadband And Narrowband Techno-Economic Evaluation of Broadband Radio Access Solutions Valter Benedetto E-Mail: valter.benedetto@cselt.it

2. Outline EURESCOM framework Techno-economic analysis –Objectives –Methodology P614 basic assumptions Investment analysis Sensitivity analysis Conclusions

3. EURESCOM 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

4. Techno-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

5. Technical features Techno-Economic Analysis - Methodology Volumes Calculation Economic Calculation Economic Results Performance Services Cost Data Base Scenario definition

6. Scenario Definition Service scenario definition Network architecture definition Network design Network evolution strategy Miscellaneous parameters

7. Service 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

8. BASE STATION BASE STATION CENTRAL STATION ISDN / PSTN Local Exchange Deployment Scenario

9. Network 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.

10. Radio 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

11. Equipment and Infrastructure Volume Calculation V1 V2 V3 V4 P1P2P3P4P5 S1S2S3 Network Elements Network Parameters Services V5 Volumes - affecting parameters Capacity per Equipment Spectrum Availability Service Penetration Required Traffic Maximum Radio Range Passed Customers % Capacity Supplied Capacity

12. Cost Component Data Base Price evolution Type of component Depreciation period MTBF (Mean Time Between Failure) MTTR (Mean Time To Repair) Maintenance class

13. Economic Calculation Service Definition Tariffs Orography User Density Equipment VolumesInfrastructures Volumes Investment Revenues DepreciationTaxes Costs OAM Cash flow Financial Indexes VANTIR PaybackROI...Inv/User Network Architecture Network Evolution Scenario Description Spectrum Availability Objectives System Features

14. P614 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

15. P614 Basic Assumptions - Service Scenario

16. P614 Basic Assumptions 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

17. P614 Basic Assumptions Network Architecture

18. P614 Basic Assumptions 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

19. P614 Basic Assumptions Radio Network Evolution 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

20. Investment 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

21. LMDS Systems Cumulated and Net Investment

22. LMDS Systems - Investment per User

23. LMDS Systems - Investment Breakdown for Class of Components Downtown Urban

24. LMDS Systems - Line Cost Breakdown Downtown Urban

25. LMDS Systems - Investment per User with Reduced Set of Services Downtown Urban

26. LMDS Systems - Comparison between Network Upgrading Strategy

27. P-MP Systems Cumulated and Net Investment

28. P-MP Systems - Investment per User

29. P-MP Systems - Line Cost Breakdown

30. P-MP Systems - Investment per User with Reduced Set of Services

31. Summary 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

32. Sensitivity 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

33. LMDS Systems - Sensitivity Analysis Urban Downtown

34. P-MP Systems - Sensitivity Analysis

35. Conclusions 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