Cost Drivers Of 4 G Evolution Safdar Imam Omantel

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Presentation to Mobile Industry vendors, leaders and managers in LTE World Summit held at Rae Exhibition Centre Amsterdam in May 2011

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  • Over the past two decades, we have seen a great transformation in the way people communicate, stay informed and be entertained. We have seen the dawn of Information Age. With mobile technology, telecoms panetration has reached or fast approaching 100%.Internet applications drive virtually all activities. This has created great demand for Data. Communication is the basic human need. People are talking about Data Psunami; we can expect Voice Psunami if what Skype and Microsoft are up to, gets materialized. However, competition has defied the law of demand. Market forces have driven the prices down rather that up with the growing demand. In this situation, Operators are faced with a difficult economic problem. It is a question of survival for Telco manager who had a history of maintaining good ROI for the shareholders.
  • Migration CostsNew Business Model
  • Radio access solutions are a primary consideration of theLTE deployment strategy, as it impacts the mobile operators’most valued asset, spectrum plus Radio last mile is highest part of TCO of MBB Network.Changes in mobile communications have always been evolutionary,and the deployment of LTE will be the same. It will be atransition from 3G to 4G over a period of several years, as is thecase still with the transition from 2G to 3G. As a result, mobileoperators must look for strategies and solutions that willenhance their existing 3G networks, while addressing their 4Gdeployment requirements without requiring a “forklift” upgrade.Mobile operators are looking for the bestMultimedia solutions to deliver an optimum userexperience and build an efficient network. Key considerations are:ContinuityAs mobile operators migratetheir networks, they will look to minimize cost andmaximize subscriber usage. This will require Overlay Network solutionthat can address 2G/3G network requirements, while atthe same time introducing 4G network evolution with maximum efficiency.Capex EfficiencyIntelligent Site SelectionImprove Quality of ServiceIntegration of intelligence at the access edge; no more dumb pipes
  • Optimized backhaul—With the introduction of 4G,the transport backhaul is a key consideration that many arerealizing after the fact. It is very important to deploy a corenetwork solution that is flexible enough to offer smoothmigration from centralized (longer backhaul) to distributed(shorter backhaul) core network nodes.User experience is very important in all Internet applications. 4G has great promises to resolve congestion. With increasing demand, typical LTE site may have peak load upto 200 mbps of avg throughput.
  • Evolved Packet Core highlights the growing importance of a common packetcore across multiple access technologies. As operatorstransition from variety of 3G specifications, there is the potential forsignificant network simplification and cost savings while introducing greater efficiencies within the core network.Critical decision here is whether to use LTE with Voice or as Data only network relying on dual mode devices, i.e., customer chooses 2/3 G network while using voice. Evolving eco-system would drive that decision for the operators.Other important factors leading to upfront capital cost in Core would be OSS’ for network management, traffic engg. And billing etc. IP v6 reconfiguration and Network Security. However, these are one-off cost impacts which may bring efficiency in the long term. Cash flow impact can be managed by staggered deployment.
  • Cost Drivers Of 4 G Evolution Safdar Imam Omantel

    1. 1. Cost and Profitability Drivers of 4G Evolution<br />Safdar Imam <br />Sr. Costing Specialist Omantel<br />Innovate and build totally connected community - together<br />
    2. 2. About Omantel<br />Omani Market<br />Population 2.7 m <br />Area (sq. km.) 309,500 <br />GDP per capita US $ 22 k<br />Telecoms penetration <br />Fixed 11% <br />Mobile 170% <br />BB 69% <br />Omantel is the leading Integrated Telco of Oman;<br />Market Capitalization US $ 2.2 b <br />Widest PSTN and GSM Networks <br />Largest GSM deployment - 2G / 3.5 G<br />Successful LTE TDD testing in July 2010 <br />
    3. 3. Examining Cost and Profitability Drivers of Technology Evolution on the Path to 4G Technologies<br />Internet and Mobile communication has dramatically transformed our way of life.<br />Increasing data wealth of the Information Age has created demands ever faster speed and wider coverage of communication networks<br />Problem: Operators are under great pressure to evolve networks to meet increasing market expectations despite decreasing prices with growing competition.<br />Solution: <br />Implement network evolution with optimum timing and costs <br />Revive profitability focus with two sided business model<br />Analyze regulatory developments <br />
    4. 4. Examining Cost and Profitability Drivers of Technology Evolution on the Path to 4G Technologies<br />
    5. 5. Knowing the Costs of Technology Evolution<br />
    6. 6. Cost Drivers of Network Elements - Radio<br />
    7. 7. Cost Drivers of Network Elements - Backhaul<br />
    8. 8. Cost Drivers of Network Elements – Core <br />
    9. 9. Profitability Focus – Two sided Business Model<br />Side 2: <br />Downstream Customers<br />Side 1: <br />Upstream Customers<br />Developers<br />Telco<br /><ul><li>New generation technologies are building blocks of “digital economy”.
    10. 10. ‘Two-sided’ platform-based business models’ have the potential to open up new market opportunities for telcos.
    11. 11. Telco provides services to ‘upstream’ service providers and ‘downstream’ end-users by enabling them to interact via a Telco platform
    12. 12. Telco collects revenue from users of the platform on both sides</li></ul>Retailers<br />Millions of Customers<br />Thousands of Segments<br />Government<br />Media Companies<br />$<br />$<br />ASPs<br />Telco – Retail<br />Source: www.telco2.com<br />
    13. 13. Regulatory Aspects – Spectrum and Licensing for Broadband<br />Incentivizing Broadband investment<br />Ensuring spectrum availability; re-farming and digital dividend<br />Funding passive infrastructure for Broadband transport.<br />Moving towards Convergence; Future of mobile and fixed hinges on integrating networks and communication services. <br />
    14. 14. Finally; Take Away Thoughts<br />Change is permanent. In the info age, communication industry has faster rate of change<br />Telcos should;<br />Evolve networks with optimum timing<br />Optimize networks; with two sided business model and utilizing existing investments<br />Use lessons learns from previous evolutions (1st to 3rd Generation)<br />Build new data pricing models and balance two sides of network demands. <br />Move regulatory environment to facilitate network and business cost optimization through convergence. <br />Innovate to build connected community, together with optimal networking, wireless or wireline. <br />
    15. 15. ThanksQ & Awww.omantel.om<br />Your emails are welcome<br />safdar.syed@omantel.om<br />

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