ITU Regional Seminar on Costs and Tariffs for SG3RG-AO
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1 ITU Regional Seminar on Costs and Tariffs for SG3RG-AO Yongsun Choi (yschoi@inje.edu) Sangwoo Lee (woody@etri.re.kr)
2 Agenda Introduction Steps of BU methodologies Dimensioning of mobile networks The BU-LRIC system in Korea Discussion 2
3 Introduction Modeling trends worldwide Theoretically complex and controversial: mathematical topics involved; resistance to change; and refusal to disclose information [Source ITU-BDT, 2008] 3
4 Introduction Principles of BU-LRIC Competitive market Long-run costs: include all the costs that will ever be incurred in supporting the relevant service demand Incremental costs: incurred in the support of the increment of demand; avoidable costs in case not supporting the increment Efficiently incurred costs Costs of supply using modern technology: choice of network technology (e.g. 3G, 4G); capacity of equipment; purchasing price and operating cost; maintenance cost [Analysys Mason, 2011] 4
5 Introduction Conceptual issues for BU-LRIC Type: actual, average, hypothetical Footprint: national, sub-national Scale: market share Service set supported traffic volume wholesale cost, retail cost network architecture issues adjustment of nodes: scorchednode or scorched-earth cost increments depreciation method weighted average cost of capital [Analysys Mason, 2011] 5
6 Introduction LRAIC+ vs. pure LRIC Illustration of the LRAIC+ and pure LRIC approaches [Analysys Mason, 2010] 6
7 Introduction Top-down vs. Bottom-up LRIC Pros & Cons compared [ITU ICT Regulation toolkit; TRA, 2011] 7
8 Agenda Introduction Steps of BU methodologies Dimensioning of mobile network The BU-LRIC system in Korea Discussion 8
9 Steps of BU methodologies Steps of Ovum BU methodology [Source: Ovum, 2006] 9
10 Steps of BU methodologies.. WIK-Consult methodology WIK-MNCM modeling process [WIK-Consult, 2007] 10
11 Steps of BU methodologies.. Analysys Mason methodology New LRIC model for mobile termination in Sweden [Analysys Mason, 2010] 11
12 Steps of BU methodologies.. Tera Consultants methodology Mobile network model structure [TRA, 2011] 12
13 Steps compared by network types Step Mobile Network Fixed Core Network Fixed Access Network 1 Network topology Node location and coverage 2 Future demand Network deployment at the street s segment level 3 Dimensioning the network Full network deployment 4 Current asset prices 5 CAPEX calculation 6 Depreciation 7 & 8 Cost allocation / Operating costs (in flexible order) 9 Service costs Cost per line [Source: TRA, 2011] 13
14 Agenda Introduction Steps of BU methodologies Dimensioning of mobile networks The BU-LRIC system in Korea Discussion 14
15 Mobile network dimensioning Dimensioning vs. Planning [Source: Holma and Toskala, 2010] 15
16 Mobile network dimensioning Requirements of network design The network must include the entire infrastructure necessary to provide the telecommunication services to users [ITU-BDT, 2008] with the required level of quality, at the lowest possible cost, and within the prevailing technical and economic constraints However, engineering issues are handled in a simplified manner with dimensioning 16
17 Mobile network dimensioning Steps of mobile network dimensioning [Source: Holma and Toskala, 2010] 17
18 Mobile network dimensioning Area simplification Considers % of each area type: Topography ignored Artificial equivalent district conversion [WIK-Consultant, 2007] 18
19 Mobile network dimensioning Traffic estimated as a total Methodology for the calculation of total traffic [Analysys Mason, 2011] 19
20 Mobile network dimensioning An example of demand consideration Example of geographic segmentation of the demand in Chile [ITU-BDT, 2008] 20
21 Mobile network dimensioning Demand estimation by population? Population and workforce in Australian POAs [WIK-Consult, 2007] 21
22 Mobile network dimensioning Simplified coverage analysis Equal cell radii applied by type, w/o propagation analysis Cell Radii for Traffic Base Stations (km) [NERA, 2010] Ovum: Maximum GSM 900 cell site radius (Km) [Ovum, 2006] 22
23 Agenda Introduction Steps of BU methodologies Dimensioning of mobile networks The BU-LRIC system in Korea Discussion 23
24 BU-LRIC system in Korea Features of BU-LRIC model in Korea Practical and detailed approach Actual traffic volumes of each BTS are collected from operators Utilization of detailed geodata: topography, roads, buildings, etc. Phased approach Preprocessing of Input data (Traffic volume & Geodata) Network design and CAPEX calculation Visual display network elements on electronic map: helps validating the efficiency of designed network Calculation of BU-LRIC Flexible S/W systems Various parameters are easily handled with data tables Easy customization due to stepwise modularized S/W systems 24
25 BU-LRIC system in Korea Overall architecture Input Data Location and Traffic data of BTS s Location of switching stations Topography, roads, building data Specifications of equipments Unit prices of equipments Asset lifetime Operating cost Conversion factor Cost of capital Components of BU process Mobile Fixed Design of hypothetical Network CAPEX for Network Elements Investment quantity Investment Cost Depreciation Access Charges for Network Elements Operating cost Cost of Capital Output Interconnection tariff for fixed and mobile operators Interconnection tariff for network elements KT: D. nodes, LE, TE; LL, LE-LE, LE-TE, TE-TE SKT/KTF/LGT: BTS, BTS Sites, BSC, MSC, CGS, HLR, BS-MSC, MSC-MSC LL: Local loop LE: local exchange TE: toll exchange 25
26 Mobile BU-LRIC Input geodata DEM (Digital Elevation Model) : Global DEM is available : Scale used: meters (pixel) Buildings (height & floorage by pixel): Not used, if n/a 26
27 Mobile BU-LRIC Rooftop elevation (by pixel) Building Height DEM 27
28 Mobile BU-LRIC BTS traffic is distributed utilizing coverage analysis Cell polygons district 63 Existing BTS sites 28
29 Mobile BU-LRIC Variable size grid segmentation and candidates of BTS sites grids 127 Candidate BTS sites 29
30 Mobile BU-LRIC Finally picked efficient BTS sites with capacity-based propagation analysis 48 Efficiently designed BTS sites 30
31 Mobile BU-LRIC Spreadsheet output: volume and CAPEX of network elements Summary of simulation (for each simulation plan) District, Operator, Traffic volume, Network type, Target Year Total costs Categorized details (each subcategorized by network types) BTS: FA, Threshold; # of BTS, unit cost (by # of sectors); sum of BTS costs BTS site (default option: rent): # of site; Deposit, Rental fee (monthly) BSC: Unit cost (min, max); # of BSC, # of BTS, CH; sum of BSC costs BTS-BSC network (default option: rent): type of cable; distance; sum of BTS-BSC network costs Ancillary equipment: Air-conditioning, fire extinguisher, QDF Powersource equipment: Rectifier, Storage battery, Cabinet panel Radio mast (6M or 40M): # of masts; unit cost; sum of mast costs 31
32 Mobile BU-LRIC Comparison of MN design methods Input data Analysis Output Steps Conventional Network Dimensioning Approach by the Korean model Network Planning Traffic Total traffic Traffic by BTS Traffic nodes.. Geography Methods Total area (km 2 ) / urbanization (%) Link budget Avg. cell radius Terrain Building Road network Coverage & capacity w/ Propagation analysis Plus.. Plus.. Cell size Same Variable Variable Network Number of Sites Locations of BTS Radio propagation Plus.. Visualization Not supported Supported Supported 32
33 Fixed BU-LRIC Cost elements of fixed networks RSS Network 10km RSS Feeder Network Distribution Network Distribution nodes Stn. A 10km 10km 12km 12km 10km 20km 20km F. Node a Stn. B Switching Network i) ii) iii) 10km 50km 15km 20km 100 회선 F. Node b 200 회선 id From / To Type Total distance Non-overlapped 1 Stn. A / Stn. B S. Net = = 60 2 Stn. A / RSS RSS Net = = 22 3 RSS / Node a F. Net = = 32 4 Stn. A / Node b F. Net = = 45 Overlapped i) 10km 1, 2, 4 ii) 10km 2, 4 iii) 20km 3, 4 33
34 Fixed BU-LRIC Spreadsheet output: Volume and CAPEX of network elements Summary of simulation (for each simulation plan) District, Operator, Target Year, Total costs Categorized details (e.g., local loop case) RSS network: # of RSS, length of duct, # of manholes, length of Fiber cable, # of equipments (Switching / Transmission); Costs Feeder Network: # of Feeder nodes, length of Duct, # of Manhole, length of cable (each Cooper or Fiber); # of equipment (Switching / Transmission); Costs Distribution Network: # of distribution nodes, length of Duct, # of Manhole, length of cable, # of poles; Costs Additionally, details of overlapped sections are provided 34
35 Fixed BU-LRIC Display of network elements on e-map Fiber nodes & network Selection of network elements to display Copper nodes & network 35
36 Agenda Introduction Steps of BU methodologies Dimensioning of mobile networks The BU-LRIC system in Korea Discussion 36
37 Discussion Refined models will contribute? Procedure for the setting of regulated tariffs [Source: Efficient Operator: Metho dologies, modeling and applicatio n for tariff regulation - t/en/itu-d/regulatory-market/pa ges/studies.aspx] 37
38 Discussions 38
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