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A Business Case Study for a Cognitive Radio System based on a Wireless Sensor Network Pål Grønsund, Ole Grøndalen, Markku L ä hteenoja CRSM 2010, IBBT-MIT  Brussels, November 22nd, 2010 Spectrum owner 1 Spectrum owner 2 Spectrum owner N Joint venture system operator
SEVENTH FRAMEWORK PROGRAMME THEME ICT-2007-1.1   The Network of the Future Project 216076
The SENDORA concept can be described as a "Sensor Network aided Cognitive Radio" technology   Primary Network Cognitive Network Wireless Sensor Network queries on spectrum status reports on spectrum status
The SENDORA system architecture has 3 main parts:  sensor network, communication network and fusion centre
The remainder of this presentation will focus on an example of a SENDORA business case for a “Joint Venture” Overview of the business case for a “Joint Venture” Introduction to Cash Flow analysis and business case assumptions Cash Flow results and sensitivity analysis Cash Flow Customers Revenue OPEX Cost CAPEX Sensors and fusion centre Cognitive functionalities New sites Customer acquisition Operation & maintenance Site rental
A set of spectrum owners establishes a “Joint Venture” that gets the right to use its owners unused spectrum At least one of the owners is an operator having a cellular infrastructure in the area Spectrum owner 1 Spectrum owner 2 Spectrum owner N Joint venture SENDORA system operator
[object Object],Rationale for the “Joint Venture” scenario ,[object Object],[object Object],[object Object],[object Object],[object Object]
In the business case scenario, the joint venture will ,[object Object],[object Object],[object Object],[object Object],[object Object]
NOTE! SENDORA is an innovative concept and much research and development remains before commercial realizations will appear  => the input data for the business case is uncertain  => the results give indications, not definite answers or strong conclusions
Traditional cash flow analysis is used to get an indication of the profitability, enhanced with sensitivity analysis ,[object Object],Cash Flow Customers Revenue OPEX Cost CAPEX Sensors and fusion centre Cognitive functionalities New sites Customer acquisition Operation & maintenance Site rental
Revenue assumptions ,[object Object],[object Object],[object Object],[object Object],Customers Revenue
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],CAPEX (CApital EXPenditure) assumptions ,[object Object],[object Object],[object Object],Cost CAPEX Sensors and fusion centre Cognitive functionalities New sites
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],CAPEX (CApital EXPenditure) assumptions Cost CAPEX Sensors and fusion centre Cognitive functionalities New sites
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],OPEX (OPerational EXPenditure) assumptions ,[object Object],[object Object],[object Object],OPEX Cost Customer acquisition Operation & maintenance Site rental
[object Object],[object Object],[object Object],Cash flow results with assumptions presented above show that there is a potential for profitability
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Sensitivity analysis show that sensor performance and costs are critical parameters Fixed sensors per km 2 NPV  [million Euro] 10 11.44 30 7.77 65 1.36 Base case 72 0 120 -8.72 Fixed sensor price [Euro] NPV  [million Euro] 50 3.98 150 2.93 300 1.36 Base case 430 0 500 -0.74 700 -2.84 1000 -5.99
[object Object],[object Object],[object Object],[object Object],[object Object],Sensitivity analysis show that sensor OPEX and share of new sites are critical parameters Fixed sensor OPEX [€/month/sensor] NPV  [million Euro] 5.0 6.82 10.0 4.09 15.0 1.36 Base case 17.5 0 20.0 -1.37 25.0 -4.10 Share of new sites NPV  [million Euro] 0 % 1.36 Base case 6 % 0.00 10 % -0.89 20 % -3.03 30 % -5.28 40 % -7.43 50 % -9,67
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],In summary and conclusion ,[object Object],[object Object],[object Object],[object Object],Questions? Pål Grønsund ( http://palgronsund.com/about )

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Crsm2010 nov22 gronsund_pal_businesscasesendora_v4

  • 1. A Business Case Study for a Cognitive Radio System based on a Wireless Sensor Network Pål Grønsund, Ole Grøndalen, Markku L ä hteenoja CRSM 2010, IBBT-MIT Brussels, November 22nd, 2010 Spectrum owner 1 Spectrum owner 2 Spectrum owner N Joint venture system operator
  • 2. SEVENTH FRAMEWORK PROGRAMME THEME ICT-2007-1.1 The Network of the Future Project 216076
  • 3. The SENDORA concept can be described as a "Sensor Network aided Cognitive Radio" technology Primary Network Cognitive Network Wireless Sensor Network queries on spectrum status reports on spectrum status
  • 4. The SENDORA system architecture has 3 main parts: sensor network, communication network and fusion centre
  • 5. The remainder of this presentation will focus on an example of a SENDORA business case for a “Joint Venture” Overview of the business case for a “Joint Venture” Introduction to Cash Flow analysis and business case assumptions Cash Flow results and sensitivity analysis Cash Flow Customers Revenue OPEX Cost CAPEX Sensors and fusion centre Cognitive functionalities New sites Customer acquisition Operation & maintenance Site rental
  • 6. A set of spectrum owners establishes a “Joint Venture” that gets the right to use its owners unused spectrum At least one of the owners is an operator having a cellular infrastructure in the area Spectrum owner 1 Spectrum owner 2 Spectrum owner N Joint venture SENDORA system operator
  • 7.
  • 8.
  • 9. NOTE! SENDORA is an innovative concept and much research and development remains before commercial realizations will appear => the input data for the business case is uncertain => the results give indications, not definite answers or strong conclusions
  • 10.
  • 11.
  • 12.
  • 13.
  • 14.
  • 15.
  • 16.
  • 17.
  • 18.

Editor's Notes

  1. The sensor network identifies ”spectrum holes” with higher detection confidence The sensor network provides improved protection of primary networks with good interference control The capacity of the cognitive radio network is improved due to better detection of spectrum holes and interference control
  2. NPV (Net present value) is the sum of a series of cash flows (revenues subtracted by costs), when discounted to the present value. NPV is the most important criteria when defining the profitability of the project. IRR (Internal rate of return) is the discount rate, that gives NPV = 0. The higher the IRR is, the better the project is. Assuming all other factors are equal among various projects, the project with the highest IRR would probably be considered the best.