Beginners: TCO of a Mobile Network
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The document discusses the Total Cost of Ownership (TCO) in mobile networks, highlighting the breakdown of capital expenditure (capex) and operational expenditure (opex). It notes that, typically, capex accounts for 30% while opex constitutes 70% of TCO over ten years, with significant costs attributed to the radio access network. The document also emphasizes the importance of various factors such as power consumption and site construction in managing costs and improving efficiencies in mobile network operations.
Beginners: TCO of a Mobile Network
- 1. Beginners: TCO of a Mobile Network @3g4gUK
- 2. Example to Understand TCO Basics ©3G4G One-off costs • Purchase PC (desktop computer) • Purchase screen
- 3. Example to Understand TCO Basics ©3G4G One-off costs • Purchase PC (desktop computer) • Purchase screen • Purchase desk • Purchase computer chair • Purchase cables, mouse, printer, etc. • One-off software costs Ongoing costs • Electricity costs • Internet connection costs • Cloud storage subscription • Software subscription costs • Hardware/Software repair costs
- 4. Example to Understand TCO Basics ©3G4G One-off costs • Purchase PC (desktop computer) • Purchase screen • Purchase desk • Purchase computer chair • Purchase cables, mouse, printer, etc. • One-off software costs Ongoing costs • Electricity costs • Internet connection costs • Cloud storage subscription • Software subscription costs • Hardware/Software repair costs Capital Expenditure (CapEx) Operational Expense or Operational Expenditure (OpEx)
- 5. ©3G4G TCO = CapEx + OpEx Total Cost of Ownership Capital Expenditure Operational Expense
- 7. How to Write CapEx & OpEx? 🤔 ©3G4G CAPEX OPEX CapEx OpEx CapEX OpEX Capex Opex capex opex
- 8. Simplified Generic Network Architecture ©3G4G AS CS Voice (PSTN) Network Data (IP) Network Device / UE Radio Access Network Core Network Air Interface PS Backhaul AS Transport Network OSS / BSSOperations & Support Network Components • RAN • Transport • Backhaul, Fronthaul, etc. • Core Network • Operations & Support • Miscellaneous
- 9. We are going to use ‘Rule of Thumb’ ©3G4G Rule of thumb: The English phrase rule of thumb refers to a principle with broad application that is not intended to be strictly accurate or reliable for every situation. It refers to an easily learned and easily applied procedure or standard, based on practical experience rather than theory. – Wikipedia Rule of thumb: A broadly accurate guide or principle, based on practice rather than theory. – Oxford Dictionary
- 10. CapEx & OpEx of a Mobile Network ©3G4G 30% 70% TCO CapEx OpEx In a typical Mobile Network, CapEx is 30% and OpEx is 70% of the TCO over a 10 year period
- 11. Network CapEx Breakdown ©3G4G 50% 15% 10% 20% 5% CAPEX RAN Transport Core Network Operations & Support Miscellaneous The RAN or Radio Access Network is the biggest cost in CapEx and this is mainly because of Spectrum costs
- 12. Network OpEx Breakdown ©3G4G The RAN or Radio Access Network is also the biggest cost in OpEx. This is mainly due to the amount of power required for RF transmission 65% 10% 5% 15% 5% OPEX RAN Transport Core Network Operations & Support Miscellaneous
- 13. RAN CapEx Breakdown ©3G4G Site Construction, Spectrum and Equipment accounts for majority of the RAN costs 15% 10% 20% 5% 10% 10% 2% 5% 15% 8% 50% RAN CAPEX Transport Core Network Operations & Support Miscellaneous Spectrum Equipment Antennas Accessories Site Construction Installation
- 14. RAN OpEx Breakdown ©3G4G Power Consumption, Site Rentals & Operations are the largest contributors to OpEx 10% 5% 15% 5% 10% 19% 19% 7% 10% 65% RAN OPEX Transport Core Network Operations & Support Miscellaneous Power Consumption Site Rental Operations Manpower Other Hw & Sw
- 15. RAN CapEx ©3G4G 20% 20% 5% 10% 30% 15% RAN CAPEX Spectrum Equipment Antennas Accessories Site Construction Installation Reducing Site Construction Costs • Site sharing • Leasing from tower companies
- 16. Site Sharing / Mast Sharing This is the most basic approach for infrastructure sharing ©3G4G CN CS/PS RNC NodeB Cell/ Frequency Site Sharing Service Platforms HSS/HLR CN CS/PS BTS BSC Cell/ Frequency Site Sharing Service Platforms HSS/HLR CN PS only eNodeB Cell/ Frequency Site Sharing Service Platforms HSS/HLR 2G 3G 4G Operator 1 Operator 2
- 17. Mast Sharing example A busy rooftop in Hawaii, an example of how complex site design is with multi-operators, multi-RATs & multi- bands... Source: Andy Sutton ©3G4G
- 18. ©3G4G Cellnex buys yet more towers, this time from Poland's Play (link) Orange announces towerco formation plans (link) Three could become the latest telco to cash in on its towers (link) Vodafone to create Europe’s largest tower company (link) Beeline, Kcell and Tele2 sign network sharing deal in Kazakhstan (link) Saudi Telecom Company (STC) capitalises on tower infrastructure (link)
- 19. RAN CapEx ©3G4G 20% 20% 5% 10% 30% 15% RAN CAPEX Spectrum Equipment Antennas Accessories Site Construction Installation Innovations in Antenna Mounting • Reduces the number of cables thereby reducing accessories cost and weight of equipment KMW antenna bolted on Nokia RRH in Rakuten Network - TMN
- 20. RAN CapEx ©3G4G 20% 20% 5% 10% 30% 15% RAN CAPEX Spectrum Equipment Antennas Accessories Site Construction Installation Innovations in Antennas • Single antenna can handle multiple bands and technologies Source: ZTE
- 21. RAN CapEx ©3G4G 20% 20% 5% 10% 30% 15% RAN CAPEX Spectrum Equipment Antennas Accessories Site Construction Installation Innovations in Equipment • Virtual RAN (vRAN) • Open RAN (OpenRAN, ORAN) • Cloud RAN (C-RAN) • Massive MIMO (mMIMO)
- 22. RAN CapEx ©3G4G 20% 20% 5% 10% 30% 15% RAN CAPEX Spectrum Equipment Antennas Accessories Site Construction Installation New Challenges with Installation • Lot more equipment • Massive MIMO equipment is much more heavier
- 23. RAN OpEx ©3G4G 15% 30% 30% 10% 15% RAN OPEX Power Consumption Site Rental Operations Manpower Other Hw & Sw Site Rental Costs • Includes backhaul costs • Includes equipment footprint costs – can be reduced by reducing the weight & size • Municipalities can help by providing reduces rates on lamp posts, etc.
- 24. RAN OpEx ©3G4G 15% 30% 30% 10% 15% RAN OPEX Power Consumption Site Rental Operations Manpower Other Hw & Sw Operations • Includes lab testing, troubleshooting, optimization, etc. • Automation, AI and ML can help reduce the costs significantly • Virtualization and softwarization can help keep costs down. • CI/CD also helping with keeping costs down.
- 25. RAN OpEx ©3G4G 15% 30% 30% 10% 15% RAN OPEX Power Consumption Site Rental Operations Manpower Other Hw & Sw Manpower • Includes field testing, drive testing & site maintenance, etc. • SON and AI can help reduce the costs significantly
- 26. RAN OpEx ©3G4G 15% 30% 30% 10% 15% RAN OPEX Power Consumption Site Rental Operations Manpower Other Hw & Sw Power Consumption • 5G has increased the power consumption with massive MIMO being the main culprit • One solution being used in practice is to switch off equipment in the night
- 27. Further Reading ©3G4G • TechnEconomyBlog: 5G Economics – An Introduction (Chapter 1) by Dr. Kim Larsen (link) • TechnEconomyBlog: The ABC of Network Sharing – The Fundamentals (Part I) by Dr. Kim Larsen (link) • SlideShare: Fundamentals of Mobile Network Sharing by Dr. Kim Larsen (link) • Deloitte: The Age of Telecom Network Automation (link) • Telecoms Infrastructure Blog: The Big Small Cell Update by iGR (link) • The 3G4G Blog: Facebook's Attempt to Connect the Unconnected (link) • Telecomlead: Vodafone CEO reveals measures to cut Opex (link) • TMN: Orange targets a billion in RAN share savings, warns rivals on tower strategies (link)
- 28. Thank You To learn more, visit: 3G4G Website – https://www.3g4g.co.uk/ 3G4G Blog – https://blog.3g4g.co.uk/ Telecoms Infrastructure Blog – https://www.telecomsinfrastructure.com/ Operator Watch Blog – https://www.operatorwatch.com/ Connectivity Technology Blog – https://www.connectivity.technology/ Free 5G Training – https://www.free5gtraining.com/ Follow us on Twitter: https://twitter.com/3g4gUK Follow us on Facebook: https://www.facebook.com/3g4gUK/ Follow us on LinkedIn: https://www.linkedin.com/company/3g4g Follow us on SlideShare: https://www.slideshare.net/3G4GLtd Follow us on YouTube: https://www.youtube.com/3G4G5G ©3G4G
- 29. Appendix Some reference TCO pictures with their source where available ©3G4G
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