A COOKBOOK for 5G-based Gigabit To The Home. Part 1: Step-by-step recipes for profitable services to MDUs

Transcription

1 A COOKBOOK for 5G-based Gigabit To The Home Part 1: Step-by-step recipes for profitable services to MDUs

2 A Cookbook for Gigabit To The Home 2

3 Table of Contents 1 Introduction 2 High-Rise MDU Use Case 2.1 Service Requirements 3 Solution 3.1 Feeder 3.2 Distribution 3.3 Drop/In-Building 4 Design Steps 4.1 Service Providers Design Parameters 4.2 Designing The Network 5 Business Metrics 5.1 Infrastructure Requirements 5.2 In-Building Connectivity 5.3 The Business Parameters - New Revenue Opportunity 5.4 Reference Benchmark 6 Conclusion

4 1 Introduction For years, service providers have focused on delivering broadband to the home. These connections have been from a few Mbps to as high as 100Mbps. Today the demand has increased and now requires gigabit per second speeds, evolving Broadband Wireless Access (BWA) networks to Gigabit Wireless Access (GWA) networks. The question now becomes: can Gigabit To The Home (GTTH) wireless services be deployed profitably? The answer is a resounding yes, and Siklu has dozens of customers doing just that with our industry leading mmwave products. We've combined all of the best practices we've seen over the years into a Cookbook for Gigabit Wireless Access. This cookbook puts together step-by-step recipes or approaches for delivering gigabit broadband services to residential and business customers profitably. The Cookbook will show you how to develop cookie-cutter network designs that can be replicated again and again to expand your GTTH business with a minimum of time for your Return on Investment (ROI). The first edition of this Cookbook addresses Multi Dwelling Unit (MDU)/apartment scenarios. It reviews the types of outdoor and indoor assets that are accessible to the service provider, such as roof-tops, in-building CAT3, coaxial cabling or fiber, and recommends a standard turnkey solution. The key components and the structured method to design the network are described. Most importantly, key business metrics are calculated for the recommended architecture, providing a reference benchmark for the ROI and the revenue opportunity. Some solutions will deliver new revenue opportunities with an ROI of 10 months, while others may have an ROI of 24 months. The results presented here based on nation-wide averaged business metrics, final ROI and business metrics will be driven by local costs and Average Revenue per User (ARPU). We will be following up with a second edition of the cookbook that will take a similar approach for low/high-rise gardenstyle communities and single-family homes. A Cookbook for Gigabit To The Home 4

5 2 High-Rise MDU Use Case MDUs are typically deployed in dense urban areas as shown in the picture below. Figure 1: High-rise MDU in Seattle, WA 2.1 Service Requirements The typical service requirements for an MDU deployment are: High Speed Internet: 100Mbps up to 1Gbps per apartment TV (optional): managed IPTV service, with guaranteed QOS Voice (optional): managed VOIP service, with guaranteed QOS. The first step is to bring a Multi Gigabits per Second (Gbps) connection to the MDU itself. From there the service needs to be delivered inside the building to each apartment. Several approaches can perform this last 100 feet delivery. Examples are: Existing cables: - twisted-pair supporting in-building DSL - coax typically used for video services can also be enhanced with in-building DSL 5

6 New cables: - CAT-5 or better - Fiber Service providers rarely deploy the full sum of the bandwidth sold to all residential customers combined, and adopt an over-subscription factor. For example, with an oversubscription factor of 20:1 this means that for every Gbps delivered to the building, the service provider can sell 20Gbps to the end users. For the trunk portion or backhaul of this network, an oversubscription factor of 50:1 might be used. Table 1: oversubscription and bandwidth calculation In-building drop Distribution segment Feeder segment Typical oversubscription factor Technology dependent: DSL: 1:1 Ethernet: 1:1 Coax: 20:1 20:1 to 50:1 50:1 to 80:1 Min. bandwidth Equivalent to peak capacity of the service offered to the subscribers. Example: 100Mbps, 1Gbps Equivalent to average capacity on the segment + the peak capacity of the service offered to the subscribers. Example: assuming an average traffic of 200Mbps and 1Gbps as the peak speed offered, the capacity in the segment should exceed 1,200Mbps A Cookbook for Gigabit To The Home 6

7 3 Solution There are 3 fundamental segments for a GWA solution for MDUs: the backhaul or broadband connection between an area containing multiple MDUs and the core network of the service provider, the distribution portion which takes the initial feed and distributes it to the MDUs individually, and the last piece delivering the service to the end customer - the drop/in-building distribution network. 3.1 Feeder The feeder can consist of a mix of fiber and/or mmwave high-capacity links, able to deliver multiple 10Gbps connections from the core network into the service area (SA) as shown in Figure 2. Figure 2: Feeder to the service area, fiber or mmwave The actual capacity isl calculated based on the oversubscription factor desired by the service provider, and the size of the service area in terms of homes served (= total homes x penetration rate). The capacity might be delivered to a single point of presence (PoP) located inside a relatively high building, or to a small number of POPs (2 to 5) depending on the size and topology of the Service Area. For example, flat areas where the Service Provider (SP) has access to 1 or 2 tall buildings might support hubs on these buildings. Hilly areas might require a PoP per valley to serve all the buildings. 7

8 3.2 Distribution The distribution between the buildings consists of a ring of point-to-point wireless rings connecting a number of buildings to the main buildings in the SA, as shown in Figure 3. The size of the ring will be constrained by network limitations in terms of desired latency, capacity to be delivered to each building on the ring and the oversubscription factor desired for the distribution. Most of the networks we have seen are planned with anywhere between 10 and 20 buildings on a ring. Figure 3: A wireless distribution ring of 9 segments between 2 POPs 3.3 Drop/In-Building The connections inside the buildings to the apartments will vary based on the availability of existing cabling, or new cabling if none available. In case of existing cabling, G.fast is the recommended technology, as it allows delivering up to 1Gbps with equal ease over up to 100m of twisted pair, or coax, from an aggregation device typically located in the basement and connecting at the main Distribution Frame (MDF) with the building wiring plant. In cases where the service provider prefers to deploy and own new cabling, CAT5/6 or fiber (Ethernet or PON) will be run from the telecom closet in the basement to all the apartments in the buildings. See Figure 4 below A Cookbook for Gigabit To The Home 8

9 Figure 4: MDU internal elements 9

10 4 Design Steps We review the design steps to create the hybrid-fiber distribution in this section, and show the typical business metrics achievable in the next section, section Service Providers Design Parameters The following pieces of information are required as inputs for the design process: 1. Service requirements: what is the desired capacity per subscriber? This can be expressed as an average bandwidth per subscriber, or minimum/guaranteed together with maximum advertised. Another option is maximum advertised and oversubscription ratio. 2. What oversubscription ratio should be used? This is driven by the types of applications to be supported, the customers to be served (primarily commercial versus residential), the service level agreement (SLA) whether committed or expected and the price desired for the service. 3. Resiliency requirements: depending on the type of customers being served, business or residential, the design requirement might be for: a. 1 link per building, in which case a hub and spoke design will be used at least for part of the network b. No single point of failure in the distribution network, meaning a minimum of 2 links per building, achieved with a simple ring design as shown in Figure 5 c. No single point of failure at the feeder level, meaning a minimum of 2 POPs per ring as shown on Figure 6 4. Buildings and subscribers: the list of buildings to be served, identified by their addresses or coordinates, and the quantity of potential subscribers, or total apartments and expected take-rate which yields the capacity needed for each building. 5. POP: a list of buildings (identified by address or coordinates) close to fiber routes for connections back to the core network. In addition these buildings should be capable of hosting a POP in terms of the available capacity per POP if already operational (or cost if to build). The maximum number of antennas per roof on each POP might also be a consideration, when roof-rights are limited or costly. 6. In-building wiring: as noted we have seen these three possible technologies for this segment, which do not impact the design of the trunk and distribution portions of the network: a. iber: an Ethernet or PON fiber network. b. CAT5/6 c. G.fast over coax or twisted pair A Cookbook for Gigabit To The Home 10

11 Figure 5: A wireless distribution ring with a single PoP Figure 6: A wireless distribution ring with 2 PoPs per ring 11

12 4.2 Designing the Network The design of the distribution network can now proceed with the following steps: 1. Traffic per building: the effective number of subscriber per building is readily available from the previous section, and can be multiplied by the minimum guaranteed traffic to derive the traffic per building. This is also where the oversubscription ratio will be implemented based on the types of customers (residential or business) and the applications being run. traffic_(per_building ) =number_of_appartments take_rate average_subscription (Mbps) 2. Antenna locations: What is on the roof also impacts where the radios are deployed. Elevator shafts, water towers and similar constructions need to be avoided to ensure LOS connectivity with the roof top mounted radios. In some cases buildings are often set back from the street, and therefore a simple conversion of the street address to coordinates does not always point to the location of the roof. 3. LOS: a list of buildings reachable from every other building in the service area is the result of validating the potential lines of sight (LOS) between all buildings, using 3D GIS data. While Google Earth may visualize the 3D earth information, it does not provide it in a way which allows automated LOS calculations. One can often retrieve LIDAR data from local government sources or agencies. Alternatively, some commercial providers now offer this information for a fee proportionate to the size of the area to be surveyed and the precision order (1 meter is better than 3 or 10m, but more expensive). 4. POP selection: the main POP needs to be determined and should be in a building with the maximum number of LOS links to other buildings in the SA. This will make it much easier to build links in star or ring topologies from this location. The optimal choice achieve connections to 25% to 40% of the targeted buildings with 1 hop back to the POP(s). 5. Redundancy Not Required: additional buildings with no LOS to the selected POP(s) can be connected by means of a radio link to a connected building(s) in previous step, ideally via the shortest route, the lowest amount of radios to POP, as shown on Figure 7, building S1 or S2. 6. Redundancy Required: rings are designed around the POP(s) with no more than X buildings (X derived by max latency target, recommended no more than 10 buildings); these rings are called the main rings. If some buildings are not on the main rings, then nested sub-tended rings are added to connect those additional buildings; see Figure 7. A Cookbook for Gigabit To The Home 12

13 Figure 7: main ring via 2 POPs, 2 sub-tended rings and 2 spoke buildings 7. POP redundancy: the main rings must pass at least 2 POPs when POP redundancy is required. When this is the case, the sub-tended rings are also attached to 2 different points in the main ring; see Figure The steps described in 4 to 7 are repeated until all targeted buildings in the service area are connected on a ring, or on a spoke, per the chosen topology. 9. Radio selection: for each link in the topology, a minimum radio capacity is derived from the aggregation of the bandwidth in the served building, and the ones down from this building if rings or chains are implemented. For example, the service provider offers a 1Gbps service to an area of 20 buildings. The buildings average 100Mbps of traffic per building, and are connected in a ring. The aggregated average traffic is 1,000 Mbps (since the ring will be split in the middle). As recommended in Table 1, the optimal planning will reserve the average bandwidth used and the peak capacity, so 2Gbps in this example on each direction of the ring, and 1,200Mbps in the feeder section. 13

14 5 Business Metrics As with any business venture, the ROI is critical to the decision on whether to proceed or not. The designs implemented along the guidelines above will typically achieve an ROI of 10 to 20 months. Siklu has developed a mmwave to the MDU business case KPI calculator available online at siklu.com/business-case-mdu to allow service providers to validate the mmwave to the MDU model using their own business practices, revenue models and other business parameters. This tool provides an excellent end-to-end analysis of major business KPIs required for understanding the MDU connectivity business case using mmwave wireless solutions and performs sensitivity analysis. Build your own business case with our MDU business case calculator. A snapshot of Key Performance Indicators (KPI) for a typical MDU project: ROI 10 Months Investment per building connected $ 5,940 Cost per apartment passed $149 Cost per apartment connected $580 The tool also provides a visual illustration of the business case for MDU connectivity application using mmwave fixed wireless technology. The best way to walk through using this tool is to review a scenario based on nation-wide averages. Specific numbers for each deployment can be inserted to yield the final ROI estimates. The business case tool consists of several parts, which are explained in next section: 1. SP Inputs a. Infrastructure requirements b. In-building connectivity considerations c. Business parameters (expected revenue opportunities) 2. Generated Outcomes: a. The subscriber base and number of connected customers b. The financial outcomes: revenues vs. expenses c. KPIs that include ROI, cost per building passed and building connected A Cookbook for Gigabit To The Home 14

15 5.1 Infrastructure Requirements The infrastructure section refers to distribution part of the network that will be implemented using mmwave radios. The mmwave links are used to extend the existing trunk network (this can be fiber or wireless and is not a part of this business case tool. The installation costs assume a whole service area / project approach. Business Case Parmeter - Distribution Infrastructure Description # of Buildings Number of buildings to be connected in the service area Topology Overhead Additional links when needed to design a ring network, optionally without a single point of failure. Siklu recommendations: No more than 10 buildings in a ring, equals 10% overhead Or no more than 10 buildings in a ring, and no more than 5 spokes per ring, equals a 6% overhead # of Links The quantity of links required to connect all the sites in the chosen topology (calculated from the # of buildings and the required overhead) Average Installation Cost per Link E-band & V-band Average Range Average cost to install a link in the given project. The model assumes: a. project based approach (not a single link installation) b. a deployment rate of 2 links/day c. the cost of radio cabling, mast and accessories (included) Assumed E-Band and V-Band ranges are based on current deployments nationwide E-band Links % E-band & V-band Link Price $ Percentage of the E-band links in the proposed project: When no spokes off the main ring, 100% of the link will be E-band When no more than 5 spokes off the rings, 70% or more of the links will be E-band Indicative volume prices for E-band and V-band radios. The prices noted is per each link and includes antenna and mounting kit 5.2 In-Building Connectivity The model includes another important assumption - that the service provider will take advantage of the existing wiring in the building and doesn't rewire the building from scratch. G.fast indoor distribution equipment is the simplest solution to connect the units. The in-building parameters in the tool are self-explanatory and based on standard industry practice. 5.3 The Business Parameters - New Revenue Opportunity This is the most important part of the business case. The tool enables the user to interactively change different parameters to instantly perform sensitivity analysis. As an example, one may change the Take Rate or The Average Number of Subscribers while analyzing your MDU business opportunity and see how it affects the ROI you will achieve. 15

16 Business Case Parameter Revenue Opportunity # of Units per Building Description Average number of units in the apartment buildings ARPU Our recommended ARPU calculation can be based on the following assumptions: 50% Buying the service package of 100Mbps at $50 25% Buying the service package of 1Gbps at $70 25% Buying the service package of Internet + TV at $130 ARPU = 50%*$50+25%*$70+25%*$130 = $75 Take Rate Average take rate for the services Operational Efficiency Potential Number of Subscribers The operational efficiency of the operator The total number of potential subscribers; equals to the number of buildings served times the units per building Connected Number of Subscribers Potential number of subscribers times the Take Rate 5.4 Reference Benchmark A reference benchmark business case for a typical high-rise MDU is represented below. The numbers used are based on a large sample of nation-wide case studies. Distribution infrastructure Amount In-building drop Amount # of Buildings 50 Ports per aggregator 10 Topology Overhead 10% Aggregator price $1000 # of Links 55 (calculated) Aggregator installation (hr) 3 Average Installation Cost per Link $1500 CPE price, per apartment $50 E-band Links % 80% CPE installation (hr) 1 E-band Link Price $4,500 Hourly labor rate $45 V-band Link Price $1,500 A Cookbook for Gigabit To The Home 16

17 Revenue Opportunity Amount KPI Result # of Units per Building 40 ROI 10 Months! ARPU $75 Annual Revenue $720,000 Take Rate 40% Operational Profit $576,800 Operational Efficiency 80% Potential Number of Subscribers 2,000 (calculated) Connected Number of Subscribers 800 (calculated) Service providers can put their own values in Siklu mmwave to the MDU business case KPI calculator available online at siklu.com/business-case-mdu and validate their own case, based on local market conditions and other local business practices. 17

18 6 Conclusion In this first release of the Siklu Cookbook, we have focused on the GTTH application to the MDU. We have described an MDU GTTH architecture that is scalable and easy to implement, as well as explain its design process methodology. We have also calculated the key metrics, showing a benchmark of reference for the Return on Investment period (ROI) in 10 months. Build your own business case with our MDU business case calculator The benchmark data is based on Siklu's experience with partners of all sizes across the nation, and are available online at siklu.com/business-case-mdu. Interested service providers can calculate the numbers for their geography, using their own assumptions in the business case tool. Service providers considering how to improve or expand their offerings in the multi-family MDU segment should include mmw based architecture in their tool-kit. With simple design practices the top line can be expanded dramatically to capture customers who were heretofore unreachable. Future editions of the GTTH Cookbook will include solutions for other markets such as low-rise garden-style communities and Single Family Units (SFU). A Cookbook for Gigabit To The Home 18

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