actix capital planning white paper

Capital PlanningWhite Paper

Enhancing the budget allocation process to sustain QoS targets

For wireless operators quality-of-service (QoS) is seen as the primary engine behind subscriber growth. But to provide and sustain a high quality network – and meet established QoS targets – operators must carefully and diligently manage resources. Arguably, meeting QoS targets imposed by both the national spectrum agency and from within the operator’s own organisation is directly dependant on the level of investment in network infrastructure and the amount of spectrum available. However, traffic carried on the network also directly impacts QoS. Here the relationship is reversed since QoS degrades with increasing amounts of traffic. These relationships clearly point to a key engineering challenge for the wireless operator: How to balance the investment in network infrastructure given the available spectrum with the amount of traffic forecast, while at the same time realising any obligatory QoS targets.

A wireless operator that fails to achieve its QoS targets will naturally investigate ways to improve network performance. The most cost efficient way of improving QoS is to optimise the configuration of the network infrastructure as well as the spectrum allocation in the network. This can be achieved by adopting automatic cell planning techniques to optimise the configuration of the network infrastructure, and using automatic frequency planning techniques to optimise the allocation of spectrum.

Nevertheless, because QoS degrades as traffic increases, at a certain traffic level, QoS targets become unattainable – even when the operator employs the best automatic optimisation techniques. If traffic is forecast to grow to or beyond this level, clearly the wireless operator must either consider investing in additional network infrastructure or possibly acquiring more spectrum. But is it that simple?

Other issues the wireless operator might want to consider include:

• Howmuchcantrafficgrowuntilthequalitydegradesbelow the QoS target?

• WhatwilltheQoSbeattheforecasttrafficlevel?

• Whatlevelofinvestmentinnetworkinfrastructureisrequiredto meet QoS targets at the forecast traffic level?

• Whatisthereturnoninvestmentoftheadditionalnetwork infrastructure to service the traffic at the required QoS level?

• Ifthereturnoninvestmentisnotadequate,whatisthenecessary increase in spectrum to meet the QoS targets?

Quality of Service (QoS)

Actix White Paper Capital Planning

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Capital Planning Process

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Since operators have typically many regions in their network, not all regions are faced with the same quality challenges simultaneously. It is therefore important to allocate capital for network investment by region to achieve an optimal network-wide solution.

Automatic optimisation software can be used to map how the optimised quality degrades with increasing amounts of traffic. The software can also recommend ways to minimise the necessary investment in network infrastructure to meet QoS targets, and analyse the return on investment. Furthermore, the analysis could derive the minimum spectrum required to meet the quality targets.

Various sources of input data is needed to define the scope of the capital planning process and to ensure all regions are scored appropriately. Input data can include:

• Marketingpriorities

• Availablecapital(budget)

• Designprocess(ensuringconsistency)

• NetworkQoSobjectives

• Revenueimpact(improvementxtraffic)

• Competitivematching(benchmarking)

• ROIandpayback

• Equipmentconstraints(useequipmentinstock)

• Scenarioanalysis(whatif,traffic,servicesetc)

Once the relevant data has been assessed, capital planning can be performed to find the optimal balance between regions and to make certain the right investment is made in each region.

1. Optimize frequency and cell plan

2. Howmuchmoretraffic can the network support? 3. Moretrafficisadded

4. Howmuchinvestment is needed to meet net work quality?

5. Howmuchmore spectrum is necessary to meet network quality?

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Today

Today

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1

2

3

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Target

QoS (S,N+)QoS (S+,N)

QoS (S,N)

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The process of allocating budget for network expansion and deployment is another challenging undertaking. Wireless operators need to consider, for example:

• Capacityandcoverageplanning

In many operator organizations there is a clear separation between the coverage planning process and the capacity planning process. Worsestill,theseprocessesareoftenperformedbyseparateteamswithin the organization. This means that not only is the budget for these tasks completely detached, there is no scoring mechanism between them. Ultimately this leads to conflicting decisions coupled with ineffective use of budget.

• Coveragesiteproposalprocess

Selectingcandidatecoveragesitesisoftensubjectiveandreliesheavily on the knowledge of the engineer responsible for identifying suitablesites.Goodcandidatecanoftenbeunjustlymissedusingthis method. Additionally, there is seldom any validation against alternative technical solutions. And in most cases only coverage is considered while disregarding the fact that an increase in interference is often triggered by a new coverage site.

• Scoringsystem

Choosing a new site is typically based on an assumed average cost persite.Thismethoddoesn’taccountforoperatingexpenditure(OPEX) with respect to reconfiguration costs. The main focus is oftenbasedonrevenueratherthanonreturnoninvestment(ROI).ThismeansthatsomelowcostsiteswithhighROIareoverlookedwhilesomehighcostsiteswithlowROIareselected.

BudgetingforNetworkExpansion

Capitalplanningobjectives

The main objective of any planning activity is to increase the overall financial result for the operator’s organization. While capacity planning, QoS delivery and spectrum re-allocation make the biggest impact on revenues, there are other areas that can release revenues too. For example:

• Deliveringaconsistentapproachacrossmarkets/regions;enforcingcertainplanningrulesandvalidatingthedataused

• Enablingprioritization:providingaconsistentscoringmechanismallowingresultstobesortedandrankedappropriately

• Reducingtimeandeffort:enablingtheplanningcycletobeperformedquickerandmorereliably

• Enablingcentralization:linkingthecentralizedplanningtoregionalandmarketdatabases

• Enablingscenarioanalysis:exploringthebudgetimplicationsofdifferentnetworkstrategies

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Figure 1.CapitalplanningprocessusingtheActixRadioplanplatform

The recently developed Actix Radioplan capital planning platform provides a framework for operators to maximize their use of resources and budget to support a high QoS network. For example, to optimize budget allocation, Actix Radioplan performs a “discovery” activity whereby the design review, corporate budgeting and capital planning process is analyzed. Based on the outcome of this analysis a detailed proposal is prepared outlining budget allocation for a nationwide roll-out.

ByusingActixRadioplan’sautomaticcellplanningtool,operatorsare better able to standardize on best processes across all markets including,forexample,costsofnetworkchangesandtrafficgrowthestimates.Thissolutioncanalsobeusedtomaximizerevenue potential before site additions, identifying the right new sites while ensuring both coverage and interference are not excludedfromtheoptimizationprocess.

ActixapproachtoCapitalPlanning

ExistingNetwork

Future Build

Future Traffic

DesignRules

Costs

Tilt Only

Antenna Change

Tilt + Azimuth

TMA

New Sector

Validated Candidate Sites

RadioplanCapital Planning Platform


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Figure 2. Coverage before and after optimized configuration

Because capital planning differs from operator to operator, the Actix Radioplan capital planning solution can be fully customized to the exact requirements of the operator. This approach maximizes network optimization. For example, in the case below, the overall network performance was first optimized by reconfiguring existing sites in the network. This optimization led to great improvements in terms of coverage of the network, as well as the ability to carry more traffic by adding more capacity.

Next,anewstudyofsitesandbudgetingwasperformedtomakesureallrequestednewsiteswouldeithermeetaminimumqualityimprovementcriterion,orhaveaclearROI.Doingthisnationwideenabledtheoperatortomeasurablydifferentiatebetweenthevariousregionsintermsofhowmany new sites could be included in the budget.

ImmediateresultsusingActixRadioplanplatform

Figure 3.ReportofapprovednewsitesbasedonqualityimprovementsandROI

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Capex SiteCapex SiteConsolidationsConsolidations


Capex siteCapex siteConsolidationsConsolidations

R e g io n 1R e g io n 1 R e g io n 2R e g io n 2 R e g io n 3R e g io n 3



Capex siteCapex siteConsolidationsConsolidations

R e g io n 1R e g io n 1 R e g io n 2R e g io n 2 R e g io n 3R e g io n 3


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Figure 4. Summary of regional CAPEX and quality improvements

An enterprise wide report was also generated offering the operator an overview of the allocation of CAPEX budget and the type of quality improvementsitcouldexpectineachregion.

Proposed Site Co-Location

Quality Improvement(Int. Erlangs)

Capital Expenditure(Cumulative $)

Net Revenue Gain($/Year)

ROI over 1 Year Period(%)

Region1

Region2

Region3

Region4

Region5

Region6

Region7

Region8

Region9

Region10

Region11

Region12

Region13

Region14

Region15

Region16

Region17

Region18

250,000

500,000

750,000

1,000,000

1,250,000

1,500,000

1,750,000

2,000,000

2,250,000

2,500,000

2,750,000

3,000,000

3,250,000

3,500,000

3,750,000

4,000,000

4,250,000

4,500,000

372,975

364,200

351,975

319,500

309,750

308,025

303,450

300,450

297,600

269,700

234,375

234,075

231,900

230,475

214,200

200,775

182,700

175,050

149

146

141

128

124

123

121

120

119

108

94

94

93

92

86

80

73

70

49.73

48.56

46.93

42.60

41.30

41.07

40.46

40.06

39.68

35.96

31,25

31.21

30.92

30.73

28.56

26.77

24.36

23.34


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Figure 5. Sites required for meeting coverage target in a single market.

Thecapitalinvestmentwasreducedby36%inthiscase

Actix’capitalplanningapproachofstandardizationandautomationofbusinesscriticalprocessesmeantquantifiablebenefitstothisparticularoperator – in short, significant improvements in coverage and capacity, plus a significant reduction in the number of sites required leading to less capital investment.

With growing levels of traffic year-on-year, network quality will inevitably degrade. The only way to ensure imposed QoS targets are sustained is for operators to be resource management driven and to embrace dynamic network optimization.

Automated wireless optimization software applications are key in this effort astheyprovidenotjustthemostcosteffectivemeanstooptimizequality,but also the ability to analyse resource requirements necessary to meet QoS targetsforanygivenleveloftraffic.TheActixRadioplancapitalplanningplatform is one such solution and, as demonstrated above, can help operators achieve considerable capital investment savings.

Automated optimization for sustained QoS

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FurtherinformationonActixperformanceengineeringsolutionscanbefoundontheWebatwww.actix.com

Actixistheinternationalmarket-leaderinwirelessperformanceengineeringsoftware.Thecompany’svendor-independentsolutionsanalyzedatafromallmajorwirelessvendorsandtechnologies,from2Gto3G.Over5,000engineersfrommorethan170operators globally–includingVerizon,Orange,Vodafone,SKTKorea,Hutchinson3GandT-Mobile–dependuponActixsoftwareeverydaytoimprovetheirwirelessoperations.ActixhasofficesintheUnitedStates,UnitedKingdom,Singapore,HongKong,ChinaandJapan.

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Americas T+17037074777 F+17037074778

China T+862153960670 F+862153960676

Germany T+49351404290 F+4935140429-50

Hong Kong T+85222956677 F+85222956687

India T+911141683064 F+911141683080

Japan T+81422454720 F+81422454720

Singapore T+6563337428 F+6563335540

Sweden T+4642389900 F+4642210585

UK T+44(0)2087356300 F+44(0)2087356301

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