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Lte: How To Transform A Promising Technology In A Real Business
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Lte: How To Transform A Promising Technology In A Real Business

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Even if LTE is still technically in a pre-mature phase, it is arousing unprecedented interest from equipment vendors and operators, as it promises to fundamentally change the mobile ecosystem enabling …

Even if LTE is still technically in a pre-mature phase, it is arousing unprecedented interest from equipment vendors and operators, as it promises to fundamentally change the mobile ecosystem enabling new services and applications.

However, in these uncertain economic times, there is no room for risky and poorly analyzed business decisions that will influence heavily the success of the LTE initiative.

Therefore, the keystone is the adoption of a holistic and iterative approach, capable of taking into account all market, technical, economic and financial aspects, ensuring the best possible alignment between business and technology strategies, identifying clearly the main cost drivers and evaluating correctly the feasibility of the investment. This requires not focusing on the single facets of the revenue forecast, technical decisions and cost calculation, but considering all these different elements in a comprehensive and integrated view, building the business case through successive approximations.

This presentation sets out the guidelines for this holistic and iterative approach in order to transform such promising technology in a real business. This presentation is supported by a business case related to the deployment of a LTE infrastructure to provide
broadband services to residential users located in the five most important Italian cities.

Published in: Technology, Business

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  • This Very useful to me to complete my project i also get very good helpful imformation from below may be it useful to you all,

    www.teletopix.org
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  • get some good topic about LTE at Below,..

    Teletopix.blogspot.com
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  • 1. LTE: how to transform a promising technology in a real business Andrea Calcagno, CEO & EVP 10th September 2009 Radisson SAS Hotel Amsterdam Schiphol Airport
  • 2. Content  Company Profile  LTE Project Life Cycle  Holistic and Iterative Approach  LTE Business Case  In a Nutshell 2
  • 3. Content  Company Profile  LTE Project Life Cycle  Holistic and Iterative Approach  LTE Business Case  In a Nutshell 3
  • 4. Company Profile  Solutions, consulting and engineering company founded in 2003 as a spin- off of the University of Pisa.  Gained quickly a foothold in the NGN/NGS scenario focusing on standard 3G and 4G wireless technologies such as HSxPA, WiMAX and LTE.  Providing the market with:  State-of-art Business Case Analysis tools for WiMAX and LTE  Next-Gen OSS/BSS components and integrated solutions, with a focus on the delivery of turnkey WiMAX CSNs, that leverage the company’s modular and scalable WROP (access & service management) and TelcoGIS (geographic information system) platforms  Selected high-value services such as strategic consulting on technology and investment plans and engineering services for network planning and design  Regular Member of the WiMAX Forum and a Member of the TM Forum. 4
  • 5. Content  Company Profile  LTE Project Life Cycle  Holistic and Iterative Approach  LTE Business Case  In a Nutshell 5
  • 6. LTE Project Life Cycle – Initial planning stage Building a carrier-class LTE network is and will remain a complex undertaking … … and the initial planning phase is very critical for the success of the initiative 6
  • 7. Initial Planning Phase – Facing Crucial Questions In these uncertain economic times, there is no room for risky and poorly analyzed decisions when facing crucial questions, such as:  What will be the best addressable market segment with a chosen technology characterization?  What will be the effect on the P&L when changing the CIR in a service bundle?  How will the characterization of the technology influence the network dimensioning?  What will be the best tradeoff between coverage and capacity requirements in the network deployment?  How will different types of eNodeBs/user equipments affect the TCO? 7
  • 8. Content  Company Profile  LTE Project Life Cycle  Holistic and Iterative Approach  LTE Business Case  In a Nutshell 8
  • 9. Keystone Holistic and iterative approach, capable of:  taking into account all market, technical, economic and financial aspects  ensuring the best possible alignment between business and technology strategies  identifying clearly the main cost drivers  evaluating correctly the feasibility of the investment Not focusing on the single facets but considering all these different elements in a comprehensive and integrated view, building the business case through successive approximations 9
  • 10. Content  Company Profile  LTE Project Life Cycle  Holistic and Iterative Approach  LTE Business Case  In a Nutshell 10
  • 11. Applicative scenario Technology 2.6 GHz, 10 MHz, FDD Service Profile User Equipment Mobile Broadband (Flat data + voice) Applicative scenario Operator Target Market CLEC Consumers Greenfield Scenario Dense Urban Urban Suburban 11
  • 12. Business case analysis tool  The business planning activity can be better done when equipped with an appropriate business case analysis tool that allows performing four main integrated analyses:  Market Analysis: estimating the potential market and revenues for 4G LTE services  Technical Analysis: dimensioning the network infrastructure to derive the required bill of quantities  Economic & Financial Analysis: calculating all key economic & financial projections and indicators  Scenario & Sensitivity Analysis: analyzing the influence of parameter and boundary condition changes 12
  • 13. Market Analysis – Territorial Data  Useful information for the coverage and capacity planning 13
  • 14. Market Analysis – Service Profile Technical Features Pricing Policies € 200 7 Mbps € 150 1 2 Mbps 64 Kbps 32 Kbps DL PIR DL CIR UL PIR UL CIR Internet Access VoIP lines per user € 27.2 VoIP User Equipment Distribution €5 Data 80% Monthly One time Monthly Lease 20% Service Fee Activation Fee Fee 14
  • 15. Market Analysis – Users and Revenues Forecast  The potential market and turnover have been estimated taking into account the Bass Diffusion Model (inclination to innovation and ‘word of mouth’ phenomenon):  Penetration rate @ Y10: 9%  Churn rate @ Y10: 7%  Net Users @ Y10 324,774  Revenues @ Y10 130 M € 15
  • 16. Technical Analysis – Technology  Parameters:  Operating Band: 2.6 GHz  Channel Bandwidth: 10 MHz  Duplexing Format: FDD 16
  • 17. Technical Analysis – Equipment Configuration Enhanced NodeB User Equipment 17
  • 18. Technical Analysis – Performance  The LTE performance has been evaluated by taking into account:  Link Budget Analysis (eNB/UE configuration, margins, etc.)  Path Loss (Cost 231 Hata Model)  Modulation & Schemes distribution  Average Radius: 0.8 ÷ 2.34 Km  Average Capacity:  Up Link 7.32 Mbps  Down Link 16.24 Mbps 18
  • 19. Technical Analysis – Network Dimensioning  A lot of relevant parameters have been taken into consideration:  Down and up link capacity demand per year  Existing backbone infrastructures, sites and radio links  Wireless backhaul technology distribution  478 eNB  1434 Logical Sectors  3 MME  3 S-GW  3 P-GW  46 Radio Links 19
  • 20. Technical Analysis – Network Roll-out  The network roll-out has been defined in terms of the percentage of year- on-year deployed infrastructure by taking into account capacity requirements  Steady-state condition (100% roll-out) @ Y5 20
  • 21. Economic & Financial Analysis – CAPEX and OPEX  To forecast expenditures, all main CAPEX and OPEX figures have been defined and calculated  Total Cumulated CAPEX 118 M €  32% UE  28% eNB  Total Cumulated COS 255 M €  40% VoIP  23% eNB  Total Cumulated SG&A 110 M €  48% Mkt & Sales  30% G&A 21
  • 22. Economic & Financial Analysis – Profit & Loss  EBITDA > 0 @ Y3  EBIT > 0 @ Y4  Net Income > 0 @ Y5 22
  • 23. Economic & Financial Analysis – Cash Flow  Peak Funding 77 M €  PBP 6.3 Years  NPV @ Y10 60 M € 23
  • 24. Scenario & Sensitivity Analysis 24
  • 25. Content  Company Profile  LTE Project Life Cycle  Holistic and Iterative Approach  LTE Business Case  In a Nutshell 25
  • 26. In a Nutshell  A holistic and iterative approach that takes into account all business and technology aspects since the outset is the keystone  The business plan activity can be better done when equipped with an appropriate business case analysis tool, which has to have some key characteristics:  Based on real best practices  Equipped with calibrated, LTE-technology-related, market, technical and economic models  Presenting manageable input and output with meaningful correlations  Supporting an iterative way of working by design in order to optimize results  TEA|LTE by WiTech supports and provides exactly all of the above 26
  • 27. Thank You for Your Attention Andrea Calcagno WiTech S.p.A. CEO & EVP Via Giuntini 25 56023 Navacchio di Cascina PISA Andrea.calcagno@witech.it Italy Phone: +39 050 775 056 int 203 www.witech.it Mobile +39 347516 44 01 Phone: +39 050 775 056 +39 050 754 719 +39 050 754 720 Fax: +39 050 75 47 22 E-mail: tea.info@witech.it
  • 28. Back up slides – The Business Case Analysis Tool TEA|LTE Andrea Calcagno, CEO 10th September 2009 Radisson SAS Hotel Amsterdam Schiphol Airport
  • 29. TEA|LTE  Empowering 4G LTE players with an effective business case analysis tool to set a solid foundation for a successful initiative  Unique and integrated application  Built over five years of extensive industry experience with strategic assignments and projects for major operators and equipment suppliers  Full compliant with the latest version (Release 8) of the LTE standard 29
  • 30. TEA|LTE – Key Characteristics  Analyzing the business case for the LTE initiative with a holistic approach, in an integrated and iterative way, taking into account all critical aspects  Supporting a fast and simplified configuration of more than 500 input parms with a number of them pre-set to typical/recommended values in the technical part  Enabling the user to view results instantly in an animated graphical format through a dashboard-styled and very easy-to-use GUI  Compliant with the LTE standard  Allowing the definition of custom bands  Manual setting of number of Users, eNodeBs, Logical Sectors, Radio Links, MME, S-GW and P-GW 30
  • 31. TEA|LTE - Four Main Integrated Analyses Analyzing the Estimating the influence of potential parameter and market and boundary revenues for 4G condition LTE services changes Calculating all Dimensioning the key economic & network financial infrastructure projections and to derive the indicators required bill of quantities 31
  • 32. TEA|LTE – Market Analysis Estimating the potential market and revenues for 4G LTE services:  Extension of the geographical areas (up to 5) to be served and their specific scenario distribution  Market segments (up to 6) to be addressed  Service profiles (up to 6) to be offered  Market segment penetration per year  Impact of churn 32
  • 33. TEA|LTE – Technical Analysis Dimensioning the network infrastructure to derive the required bill of quantities:  Technology characterization  Type of eNB (up to 3) and UE (up to 6)  Path loss model for the link budget analysis  Down and up link capacity demand per year  Existing backbone infrastructures  Existing sites  Existing radio links  Wireless backhaul technology distribution 33
  • 34. TEA|LTE – Economic and Financial Analysis Calculating all key economic & financial projections and indicators to assess the feasibility of the initiative:  CAPEX & OPEX  Depreciations  Interest rate on borrowings, tax rate, discount rate  Financing  Equity  Perpetual growth 34
  • 35. TEA|LTE – Scenario and Sensitivity Analysis  Analyzing the influence of parameter and boundary condition changes, to identify the most critical factors for the success of the initiative  Allowing a fast and iterative fine-tuning of the business case, in real-time and total privacy  Presenting the results in an animated graphical format instantly from the different Market, Technical, Economic & Financial perspectives 35
  • 36. TEA|LTE – Comprehensive Report  Automatically compiled and published in editable and PDF formats.  Containing a complete summary (with tables, diagrams and charts) of:  Inputs and assumptions  Results of the market analysis  Outcome of the technical modeling  Economic and financial statements for up to ten years 36

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