dimensioning and cost structure analysis of a wide area data service network

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  1. 1. Wireless Infrastructure Deployment and Economics Dimensioning and cost structure analysis of wide area data service network By: Ahmad Bazzari Introduction: In this paper, I will study the dimensioning and design a radio access network (mobile broadband), analyze the cost structure for different Radio Access Technologies (RATs) in little Belgium for an operator working in a specific area type over a period of 5 years. Inputs and assumptions: I will be starting from the following inputs, and later on other assumptions will be introduced. Country Little Belgium Operator Incumbent Network status Existing (GSM) Distance between sites 0.5 Km Cell radius r=d/sqrt (3) Available RATs WLAN, UMTS Micro, HSPA Micro Population density 2000 users/sqrt Km Type of area Urban Density of users 2000 per sqrt Km Coverage area 1000 Km2 Usage MBB as substitute Approach: The following analysis steps will be followed: 1. User demand calculation 2. Cost structure description 3. Coverage, capacity and cost model for the different available RATs 4. Estimation of network costs: CAPEX, OPEX, and NPV 5. Comparison and recommendation
  2. 2. Analysis 1. User demand calculation Each year we have to cover 20% out of a total area of 1000Km2, which is 200 Km2. Then by using the assumption of a required penetration of 4% we can find the density of users, and then the total number of users to be covered as follows: 0.06 X 2000 X 200 = 24000 Now this figure represents year 1 of our study, by repeating the calculation for the 5 years, we get the following results: Year Area to be covered each year Penetration (% of population) total number of users to be covered 0 0% 0 Km2 4% 0 1 20% 200 Km2 6% 120000 2 40% 400 Km2 8% 160000 3 60% 600 Km2 10% 200000 4 80% 800 Km2 12% 240000 5 100% 1000 Km2 14% 280000 Table 1.1 Coverage in terms of area and users The next step will be calculating the usage and demand per user. In this scenario we assume that the usage of Mobile Broadband is as substitute according to the following yearly growth: Type of user Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 MBB as substitute 5 6 7 8 9 10 Table 1.2 Usage per user (GB/month) The target now is to find the user demand in Mbps. To do that, we simply perform the following calculation: [[(Usage per user in GB/month) X (Convert GB to MB)] / (convert month to second)] X (Convert Byte to bit) A few assumptions are made as follows: - Traffic figures are for 4 hrs/day and - The month is 30.5 days For year 1: [[( 6 X 1024)] / (30.5 X 4 X 60 X 60)] X 8 = 0.111912568 Mbps Then to find the total demand each year, we multiply by the corresponding total number of users, for year 1, this is 0.111912568 X 120000 = Mbps. Furthermore, by dividing this number by the area required to be covered, we can find out the required data rate per square kilometer.
  3. 3. Year User demand (Mbps) Total demand for all users (Mbps) Total demand (Mbps per Km2) 1 0.111912568 13429.5082 67.14754098 2 0.130564663 20890.34608 52.22586521 3 0.149216758 29843.35155 49.73891925 4 0.167868852 40288.52459 50.36065574 5 0.186520947 52225.86521 52.22586521 Table 1.3 Capacity demand As an Incumbent operator having existing network, we find out the number of existing sites, using the provided inputs: - Cell radius = D/sqrt (3) => 500/sqrt (3) = 288.7 meters. - Assuming hexagonal cells, we can find the cell area ( = 3sqrt(3) r^2 / 2) = 0.2165 Km2, Now dividing by the total area, we get 1000/0.2165 = 4619 sites. As this study looks at an Incumbent operator, I assumed the whole 4619 sites are already deployed (despite the provided table of area to be covered, these figures will be used for capacity analysis) 2. Cost structure description In this scenario three different Radio Access Technologies are to be studied and compared. WLAN, UMTS Micro, and HSPA Micro. The cost structure analysis includes: CAPEX - Investments such as radio and transmission equipment, sites and installation. OPEX - Running costs such as site leases, fees for leased lines and O&M. NPV - The net present value measures the profitability of a project by looking at the cash moving in and out of it, in a given period. Our assumption here is 10% All individual costs are given as inputs; The price erosion of all equipment is 5% 3. Coverage, capacity and cost models 4. Estimation of CAPEX, OPEX, and NPV
  4. 4. A. WLAN: As we calculated, we have already 4619 sites with a radius of 0.289 Km. Now, for the WLAN with a radius of 0.03 Km, we clearly need more sites for coverage, then we can check the capacity. Year area to be covered each year New cell area Existing sites (924 can be utilized yearly) Total sites needed New required sites 0 0% 0 Km2 0 4619 0 0 1 20% 200 Km2 0.00234 924 85470 84546 2 40% 200 Km2 0.00234 86394 85470 84546 3 60% 200 Km2 0.00234 171864 85470 84546 4 80% 200 Km2 0.00234 257334 85470 84546 5 100% 200 Km2 0.00234 342804 85470 84546 Table 3.1 Coverage demand for WLAN Year Total demand (Mbps per Km2) Total demand per new site (Mbps) WLAN AP Capacity (Mbps) *assumtion 1 67.14754098 0.157125246 10 2 52.22586521 0.122208525 10 3 49.73891925 0.116389071 10 4 50.36065574 0.117843934 10 5 52.22586521 0.122208525 10 Table 3.2 Capacity demand for WLAN sites A we can notice, in this case the coverage is the issue and the factor which will determine the new sites to be deployed. Now the financial aspects are discussed to deploy WLAN. - CAPEX: Year Sites Number of sites Equipment Installation and buildout Total CAPEX Year 1 New 84546 85470 253638 339108 Year 2 New 84546 81196.5 253638 334834.5 Year 3 New 84546 77136.675 253638 330774.675 Year 4 New 84546 73279.84125 253638 326917.8413 Year 5 New 84546 69615.84919 253638 323253.8492 Total (Keuro)= 1,654,888.87 Table 4.1 CAPEX analysis for WLAN
  5. 5. - OPEX: Year O&M Site lease Backbone data Electricity Total cumulative OPEX Year 1 33910.8 84546 85470 1709.4 205636.2 Year 2 33483.45 84546 85470 1709.4 410845.05 Year 3 33077.4675 84546 85470 1709.4 615647.9175 Year 4 32691.78413 84546 85470 1709.4 820065.1016 Year 5 32325.38492 84546 85470 1709.4 1024115.887 Total (Keuro)= 3,076,310.16 Table 4.2 OPEX analysis for WLAN - NPV: Table 4.3 net present value for WLAN Year 1 2 3 4 5 Total payments 544744.2 745679.55 946422.5925 1146982.943 1347369.736 Discount rate 10% 10% 10% 10% 10% New value 495222 616264.0909 711061.3017 783404.7831 836610.599 -3442562.775NPV=
  6. 6. B. HSPA Micro: As we calculated before, we have already 4619 sites with a radius of 0.289 Km. Now, for HSPA with a radius of 0.1 Km we clearly need to deploy more site in order to maintain a 100% coverage. Year area to be covered each year New cell area Existing sites (924 can be utilized yearly) Total sites needed New sites required 0 0% 0 0 4619 0 0 1 20% 200 Km2 0.02598 Km2 924 7698 6774 2 40% 200 Km2 0.02598 Km2 8622 7698 6774 3 60% 200 Km2 0.02598 Km2 16320 7698 6774 4 80% 200 Km2 0.02598 Km2 24018 7698 6774 5 100% 200 Km2 0.02598 Km2 31716 7698 6774 Table 3.3 coverage demand for HSPA micro Before we deploy these sites, we check the capacity demand: Year Total demand (Mbps per Km2) Total demand per new site (Mbps) HSPA Capality (Mbps) *assumtion 1 67.14754098 1.744493115 3 2 52.22586521 1.356827978 3 3 49.73891925 1.292217122 3 4 50.36065574 1.308369836 3 5 52.22586521 1.356827978 3 Table 3.4 Capacity demand for HSPA micro sites As we can see, Coverage is the only issue here, the deployed sites are enough to provide the required capacity. Now the financial aspects are discussed: - CAPEX: Yea r Sites Number of sites Equipment Installation and buildout Data line installation Total CAPEX 1 New 7698 115470 270960 38490 424920 2 New 7698 109696.5 270960 38490 419146.5 3 New 7698 104211.675 270960 38490 413661.675 4 New 7698 99001.0912 5 270960 38490 408451.0913 5 New 7698 94051.0366 9 270960 38490 403501.0367 Total (KEuro)= 2,069,680.30 Table 4.4 CAPEX analysis for HSPA
  7. 7. - OPEX: Year O&M Site lease Backbone data Electricity Total cumulative OPEX 1 42492 30792 7698 1539.6 82521.6 2 41914.65 30792 7698 1539.6 164465.85 3 41366.1675 30792 7698 1539.6 245861.6175 4 40845.10913 30792 7698 1539.6 326736.3266 5 40350.10367 30792 7698 1539.6 407116.0303 Total (Keuro) = 1,226,701.42 Table 4.5 OPEX analysis for HSPA - NPV: Year 1 2 3 4 5 Total payments 507441.6 583612.35 659523.2925 735187.4179 810617.067 Discount rate 10% 10% 10% 10% 10% New value 461310.5455 482324.2562 495509.6112 502142.8986 503329.4217 NPV= -2,444,616.733 Table 4.6 net present value for HSPA
  8. 8. C. UMTS Micro: As we calculated before, we have already 4619 sites with a radius of 0.289 Km. Now, for UMT micro with a radius of 0.15 Km we clearly need to deploy more site in order to maintain a 100% coverage. But the interesting thing is we wont need that from year 1. Year area to be covered each year New cell area Existing sites (924 can be utilized yearly) Total sites needed New sites required 0 0% 0 0 4619 0 0 1 20% 200 Km2 0.05846 924 3421 2497 2 40% 200 Km2 0.05846 4345 3421 2497 3 60% 200 Km2 0.05846 7766 3421 2497 4 80% 200 Km2 0.05846 11187 3421 2497 5 100% 200 Km2 0.05846 14608 3421 2497 Table 3.5 coverage demand for UMTS micro Before we deploy these sites, we check the capacity demand: Year Total demand (Mbps per Km2) Total demand per new site (Mbps) UMTS capacity (Mbps) *assumtion 1 67.14754098 3.925445246 1 2 52.22586521 3.05312408 1 3 49.73891925 2.907737219 1 4 50.36065574 2.944083935 1 5 52.22586521 3.05312408 1 Table 3.6 Capacity demand for UMTS micro sites As we can see here, After solving the coverage issue, we have now a capacity issue. The deployed sites are not enough for the capacity demand. Sectorizing and adding more carriers are the preferred options, only when that is not enough, adding new sites is introduced. Year Shortage in Capacity (Mbps) Solution 1 3 adding 2 secots (total 3) + adding one carrier to a sector 2 3 adding 2 secots (total 3) + adding one carr

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