haig sarkissian: the economic impact of femtocells on the 4g lte business case

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The Economic Impact of Femtocells on the 4G LTE Business Case

By Haig Sarkissian

March 4, 2014 Barcelona


�  How can Femtocells add coverage and capacity? � Very small cells in very large numbers

� Building an effective business case for HetNets

� Assumptions � Impact on 4G Business Case � Sensitivity Analysis

� Opportunities for Mobile and who are also Cable

operators

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… Agenda… 2


Who We Are �  Consulting group focused on the broadband wireless market – 3G, 4G, LTE, Wi-Fi

�  Expertise in Broadband technology, technical-financial Modeling and strategy �  Investment grade business case development

�  RFP/RFQ development, administration and response analysis

�  Vendor evaluation and selection

�  Technology evaluation and selection

�  Spectrum auction strategy

�  Go to market strategy

�  Investor presentations & due diligence

�  Targeting the “Broadband Wireless Ecosystem” �  Service Providers, Component Vendors, Equipment Vendors, Regulators and investors

�  Industry leader with over 80 Wireless Business Cases and network deployment plans for clients in North America, Latin America, Asia, Europe, Africa & Middle East

�  Proprietary tools to model broadband wireless networks, assessing the impact on ROI

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Randall Haig Magnus

Hideo

Berge

Mark Riad Arif

Hideo

March 18, 2015

Michael


4 …service provider clients…


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TECHNOLOGY

SOFTWARE/SERVER

SEMICONDUCTOR

POLICY

M2M

HOSTED SERVICE

HANDSETS EQUIPMENT

DATACENTER

CORE NETWORK

…equipment vendor clients…


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Femtocells for coverage and capacity


Critical Questions � Can Femto Cells be used to provide meaningful

coverage and capacity � What do Femto cells cost? � Who pays for Femto equipment? � Who pays for Femto installation and backhaul? � How many Femtos are needed per square km? � Can you deploy Femtos without SON? � Can Femtos form a primary network? � Business Case Impact of Femto?

7 … Why Femtos?


Proposed Answers �  Can Femto Cells be used to provide meaningful

coverage and capacity? Perhaps! �  What do Femto cells cost? US$30 – US$100 �  Who pays for Femto equipment? MNO �  Who pays for Femto installation and backhaul?

Consumers �  How many Femtos are needed per square km?

Many! �  Can you deploy Femtos without SON? No! �  Can Femto form the primary network? No! �  Business Case Impact of Femto?

8 … Why Femtos?


Femto Case Study

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Introduction to WiROI™ � 4G Operator Business Case Tool � Complete Financial and ROI Analysis of a 4G

Network Roll Out � 10 Year Business Case � Flexible For All Markets with Over 450 Input

Variables � Easy to use Dashboard GUI for Sensitivity

Analysis and “What If” Scenarios � Build a comprehensive business model

… WiROI…


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WiROI™ Research Analysis Case Study – NYC Femto Analysis

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Baseline: NYC – Dense Urban Case Study

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New York City

8.1 million Population

LTE using AWS (1700MHz)

10+10MHz Channel

Coverage 789 sq km

3.8 Million 4G subscribers

376 Coverage Sites

6,327 Capacity Sites

Cumulative CAPEX $1.6B

Cumulative OPEX $2.7B

TCO $4.3B

�  Assumption: LTE deployment in Urban, NYC market, USA

�  Activity: Simulate TCO impact of implementing Femto Technology

�  Identify: The scenario for optimal financial return

�  Analyze: Understand main drivers of the results

… NYC Case Study …


14 … LTE Coverage & Capacity

Cells – Microcells…


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17 … LTE Coverage & Capacity

with Femto …


Femto ECONOMICS

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19 Cum CapEx baseline


20 Cum CapEx with

Femto…


21 Network OpEx baseline


22 Network OpEx with

Femto…


23 TCO baseline


24 … TCO with Femto …


Summary and Conclusions

25 … Why Femto?


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LTE Baseline With Femto Deployment Delta % / $

Total CAPEX $1,616m $597m 63.1% / $1019m

Network OPEX $683m $373m 45.4% / $310m

Network TCO $2,299m $970m 57.80% / $1,329m

… NYC Market Results …

�  To provide coverage and capacity using LTE Micro Cells �  376 Small Cells for Coverage and for Capacity in year one �  By year Ten, 6,327 Small Cells are needed for Capacity �  If Femtos were deployed – we would need 1,725 Small Cells by year 10 �  We would also need ~200,000 Femto cells (6% penetration) of 3.3m subs

� 

�  Network OpEx savings of 45% �  Value derived per Femto = $6,645 of Cumulative Savings over 10 year �  200,000/789sq.km=250 per sq.km.


Pros and Cons of Femtocells

Pros � Huge capacity per

square meter � Very low site rental,

power and backhaul expenses

� Scales with time

27 … Why Femto?

Cons �  Large numbers

needed for meaningful coverage

�  Lack of control by MNO

�  Serious SON needed to make them scale


WiROI™ GUI Demo

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Test drive WiROI™ by registering online at www.wireless2020.com to gain access to our

online demo or call us for a WebEx Demo.

USA - Western Region Randall C. Schwartz +1-650-490-3090 [email protected]

USA - Eastern Region Haig A. Sarkissian +1-408-884-1561 [email protected]

Amman Office Khaled Amayreh [email protected]

Peru Office Magnus Johansson +51 988 352 616 [email protected]

Boston Office Berge Ayvazian [email protected]

Media Relations Robin L. Bestel +1-610-861-5956 [email protected]

…test drive our WiROI™ tools online…

Dubai Office Dr. Riad Hartani [email protected]

Tokyo Office Dr. Hideo Okinaka [email protected]