4G (LTE) Business Case for 2.6 GHz
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Personal Broadband Observatory 4G Business Case for 2.6 GHz 1 Andrea Calcagno, Observatory Chairman and CEO & EVP WiTech SpA
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Building carrier-class LTE networks is a complex undertaking and the initial planning stage, where the business case is defined and the budget is allocated, is critical for setting a solid foundation for the success of the initiative. During this webinar, participants will learn a holistic, iterative approach to developing business cases for LTE Networks. Participants will also get exposure to various tools available as well as best practices used in network planning.
Transcript of 4G (LTE) Business Case for 2.6 GHz
Personal Broadband Observatory
4G Business Case for 2.6 GHz
1
Andrea Calcagno, Observatory Chairman and CEO & EVP WiTech SpA
Agenda
• 4G Technologies
• 4G Deployment Model
• Business Case
• Conclusion• Conclusion
4G Technologies
Rel 1.0 802.16e-2005 Rel 1.5 802.16e-2005 Rel 2.0 802.16m
Mobile Mobile WiMAXWiMAX
3GPP3GPPIP E2E Network
IMT-
2008 2009 2010 2011 2012
HSPA Rel-6 HSPA+ Rel-7 &Rel-8
LTE & LTE Advanced
IP E2E Network
CKT Switched Network
OFDMA - BasedCDMA - Based
IMT-Advanced
4G Technologies
2G/3G/3.5G2G/3G/3.5G
Core NetworkT1,E1
Next GenerationAccess Network
Data Overlay or Replacement
LTE or WiMAX
All-IP CoreNetwork
Increased BH Capacity
Comparable Capex – New Spectrum Need
4G Technologies
Deployment Model
Hotspot coverage Home Base Station
Urban Coverage National Coverage
Business Case
Scenario: Urban Coverage ( Roma, Milano, Napoli, Torino , Firenze)
4G Technology: LTE ( 10 MHz, FDD, MIMO 2x2) Band: 2.6 GHz
Urban Scenario Dense Urban Scenario
Operator Type: CLEC ( COMPETITIVE LOCAL EXCHANGE CARRIER ) or Green Field
Target Market: ConsumerService Profile: Mobile Broadband (Flat Data and V oIP)
Devices: Handset and Tablet
Business Case Tool: TEA|LTE
Business Case – Market Analysis
Roma
Summary
Roma
Business Case – Market Analysis|Service Profile
Handset 70% - Tablet 30%
Business Case – Market Analysis|Forecast
Roma| Total Users Forecast
Business Case – Market Analysis|Forecast
Roma| Lost Users Forecast
Business Case – Market Analysis|Forecast
Roma| Net Users Forecast
Business Case – Market Analysis|Forecast
Total Net Users Forecast
Business Case – Market Analysis|Forecast
Total Revenues
Business Case – Technical Analysis|Technology
4G Technology: LTE ( 10 MHz, FDD, MIMO 2x2) Band: 2.6 GHz
Business Case – Technical Analysis|Equipment
Base Station: eNode B Devices
Business Case – Technical Analysis|Perfomance
Business Case – Technical Analysis|Perfomance
Business Case – Technical Network Dimensioning
MMES-GW/P-GW
eNode B
UT
Business Case – Technical Network Dimensioning
MMES-GW/P-GWDA RIFARE
eNode B
UT
e Node B with MW BH Urban 20%
Dense Urban 10%
Business Case – Roll Out
MMES-GW/P-GW
eNode B
UT
Business Case – EF Analysis
Personnel
Business Case – EF Analysis
CAPEX & OPEX
Business Case – EF Analysis
Income Statement
EBITDA > 0 3rd YearEBIT > 0 4th YearNet Income > 0 6th Year
Business Case – EF Analysis
Peak Funding 74 M €
Cash Flow
Peak Funding 74 M €PBP 6.3 YearsNPV 18,45 M€CFCF 100 M€
Business Case – Conclusion
ARPU
Customer
4G Business Case – Urban Coverage – CLEC/Green Field
Value Added ApplicationsAdvertising RevenuesBroadband Devices
New pricing modelMore devices for User
Lifetime
CAPEX
OPEX
Appl. Open AccessBetter User Experience
No Legacy
Economies of scaleAll-IP NetworkSpectral EffinciencyVirtual Network Opportunity
FTTS
Flat Architecture
BackupBackup
Slide sul Business Case Tool: TEA-LTE
WiMAX & LTE Project Life-Cycle (1)
As for any carrier-class Broadband Wireless Access infrastructure,
building a WiMAX & LTE network is and will remain a complex
undertaking, …
Business Case
Budget Allocation
Definitive Project
Network Building
Quality Assurance
Services Launch
Optimization
WiMAX & LTE Project Life-Cycle (2)
… and the initial planning phases are particularly c ritical to set a solid
foundation for the success of the initiative. …
Business Case
Budget Allocation
Definitive Project
Network Building
Quality Assurance
Services Launch
Optimization
A Holistic, Iterative Approach is Needed Since the Outset
Market AnalysisEvaluating the potential market for WiMAX & LTE ser vices,
identifying target markets, defining service profil es, and forecasting Revenues
Taking into account all technology and business asp ects to ensure an iterative alignment of business and technology strategies all owing to identify all main cost
drivers
Technical AnalysisDimensioning the WiMAX & LTE
Access and Backhauling network infrastructures, defining the
required bill of quantities
Economic & Financial AnalysisCalculating Capex & Opex and
evaluating all WiMAX & LTE Business Plan’s KPI
Scenario & Sensitivity Analysis
Iterative fine-tuning of the WiMAX & LTE Business Plan, analyzing the influence of parameter and boundary condition changes
WiTech TEA Family of Business Case Analysis Tools
Supporting 4G operators, vendors and consultants in their strategic planning
activities with thoroughly integrated techno-economic analyses
Market
Analysis
TM
LTE
Technical
Analysis
Scenario &
Sensitivity
Analysis
Economic &
Financial
Analysis
TM
WiTech TEA Family of Business Case Analysis Tools
� Based on real best practices
� Equipped with well calibrated, WiMAX & LTE
TM
� Equipped with well calibrated, WiMAX & LTE technology-related market, technical, and economic models
� Presenting manageable Input and Output with meaningful correlations
� Supporting an iterative way of working by design through an easy-to-use, dashboard-styled GUI
LTE
TM
TEA|WIMAX & TEA|LTE – Market Analysis
� Evaluating the potential market for WiMAX & LTE services, considering:
– Type of territory (dense urban, urban, suburban/exurban, rural)
– Type of segment (residential/soho; – Type of segment (residential/soho; small, middle, and large enterprises/institutions)
– Type of application model (fixed, nomadic, portable, and mobile)
– Type of service (technical characteristics and pricing policies)
– Churn impact
TEA|WIMAX & TEA|LTE – Technical Analysis
� Preliminary dimensioning the WiMAX & LTE Access & Backhauling network infrastructures, considering:
– Down-link and up-link capacity demand (by market segment and rollout plan)
– Aggregated total capacity– Existing backbone infrastructures– Type of wireless backhauling – Type of wireless backhauling
technology (SDH, PDH, IP Ethernet, License exempt)
– Base Station / Enhanced Node B & User Terminal / User Equipment characterization (antenna gain, transmit power, diversity gain, losses, sector number, terminal type, MIMO)
– Path loss model (Cost-231, SUI, ECC-33, Log-Normal with/without Shadowing, Free Space)
– Compliance with standard WiMAX Forum’s Fixed & Mobile System Profiles (plus the possibility to define custom profiles)
TEA|WIMAX & TEA|LTE – Economic & Financial Analysis
� Calculating all key economic & financial figures and evaluating KPI in the WiMAX & LTE initiative's Business Plan:
– Capex & Opex (spectrum license, connectivity, license, connectivity, backhauling, BTS / eNB, UT / UE, ASN GW & CSN / EPC & CN, personnel, marketing, SG&A, etc.)
– Depreciations
– TCO (Total Cost of Ownership)
– Relevant Indicators (Gross Margin, EBITDA, EBIT, NPV, IRR, PBP, Shareholder value, etc.)
TEA|WIMAX & TEA|LTE – Scenario & Sensitivity Analysis
� Enabling the user to fine-tune the WiMAX & LTE initiative’s business plan, in real-time and total privacy, and to view the results in an animated results in an animated graphical format instantly for all analyses:
– Market Analysis
– Technical Analysis
– Economic & Financial Analysis
