Techno-economic study

Bart Lannoo, Jan Van Ooteghem

IBBT – IBCN – UGent

2

Forecasting

Determining rollout scheme

Calculating potential Internet

on train users

Forecasting the number of

train passengers

Flowchart business case

Technology

assignment

Determining min. technology

requirements

Computing technical scenarios

Cost/benefit

model

Calculating cost / benefit

model

Evaluation

Output business model

3

Forecasting

0

20000

40000

60000

80000

100000

Nu

mb

er

of

pa

ss

en

ge

rs p

er

da

y

RelationOostende - Eupen

Passenger forecasting

Adoption

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

First class adoption

Second class adoption

4

Forecasting

Determining rollout scheme

Calculating potential Internet

on train users

Forecasting the number of

train passengers

Flowchart business case

Technology

assignment

Determining min. technology

requirements

Computing technical scenarios

Cost/benefit

model

Calculating cost / benefit

model

Evaluation

Output business model

5

2. Wireless data networks

WiFi / WiMAX / Flash-OFDM

Dedicated networkfor Internet on the train

Used outdoor technologies

Satellite

1. Inherent delay:RTT ca. 500 ms

2. LOS required

GPRS / UMTS / HSDPA

1. Mobile networks

Network frommobile operators

3. Satellite networks

DVB-S2 / DVB-RCS

Suited for rural areas(cf. high-speed trains)

6

Potential coverage problems

Networks URBAN TUNNELS RURAL

Mobile network +++ ++ +

Wireless data network ++ ++ ++

Satellite network + +++

7

Technology assignment

Mobile networkWireless data network Satellite network

Full WiMAX network

Only UMTS/HSDPA

WiMAX where UMTS/HSDPA is insufficient

Pre-installed WiMAX network on certain tracks

1 way satellite + UMTS/HSDPA for uplink connection / gap filler

Mainscenarios

UMTS

UMTS+WiMAX

WiMAX+UMTS

WiMAX

Pre-installed WiMAX antennas in stationsWiMAX STAT.

SAT. 1 WAY

SAT. 2 WAY 2 way satellite + UMTS/HSDPA as gap filler

Specific cases

Case 1

Case 2

Case 3

Case 5

Case 4

Case 6

Case 7

8

Technology mapping

None - UMTS – HSDPA – WiMAX

2008

2009

2010

2011

2012

UMTS + WiMAX

9

Forecasting

Determining rollout scheme

Calculating potential Internet

on train users

Forecasting the number of

train passengers

Flowchart business model

Technology

assignment

Determining min. technology

requirements

Computing technical scenarios

Cost/benefit

model

Calculating cost / benefit

model

Evaluation

Output business model

10

Cost parameters

Wirelessdata

networksMobile

networksSatellite

networks

Train equipment Outdoor antenna

Indoor network+ + +++

Network equipment Trackside network

NOC+++ + +

General costs Helpdesk

Sales (billing)

Marketing

++ ++ ++

Operations Maintenance and repair

Network management

License costs

+++ + ++

Network connection Outdoor link + +++ ++

11

Revenue schemes

Ticket types

Prepaid cards per hour (e.g. hotspot service)

Monthly subscriptions

Ticket price

Dependent on offered service: €2.9 – €3.9 (5 - 55 kbps)

Service of 30 kbps: Prepaid: €3.4 / Subscription: €18

Two revenue scenarios

Both first and second class paying

First class free Internet, second class paying

Modal switch from 1st to 2nd class!!!

12

Forecasting

Determining rollout scheme

Calculating potential Internet

on train users

Forecasting the number of

train passengers

Flowchart business case

Technology

assignment

Determining min. technology

requirements

Computing technical scenarios

Cost/benefit

model

Calculating cost / benefit

model

Evaluation

Output business model

13

NPV analysis (10 years, 15% discount rate, 1st class free Internet)

-15

-10

-5

0

5

10

15

5 10 15 20 25 30 35 40 45 50 55

NP

V [M

€]

Bandwidth per user [kbps]

UMTS

WIMAX

UMTS + WIMAX

WIMAX + UMTS

WiMAX STAT.

SAT 1 WAY

SAT 2 WAY

-5

-10

-15

30 kbps per individual user ≈ user experience of 1 Mbps

14

-15

-10

-5

0

5

10

15

5 10 15 20 25 30 35 40 45 50 55

NP

V [M

€]

Bandwidth per user [kbps]

UMTS

WIMAX

UMTS + WIMAX

WIMAX + UMTS

WiMAX STAT.

SAT 1 WAY

SAT 2 WAY

-5

-10

-15

NPV analysis (10 years, 15% discount rate, 1st class free Internet)

30 kbps per individual user ≈ user experience of 1 Mbps

15

-15

-10

-5

0

5

10

15

5 10 15 20 25 30 35 40 45 50 55

NP

V [M

€]

Bandwidth per user [kbps]

UMTS

WIMAX

UMTS + WIMAX

WIMAX + UMTS

WiMAX STAT.

SAT 1 WAY

SAT 2 WAY

-5

-10

-15

NPV analysis (10 years, 15% discount rate, 1st class free Internet)

30 kbps per individual user ≈ user experience of 1 Mbps

16

-15

-10

-5

0

5

10

15

5 10 15 20 25 30 35 40 45 50 55

NP

V [M

€]

Bandwidth per user [kbps]

UMTS

WIMAX

UMTS + WIMAX

WIMAX + UMTS

WiMAX STAT.

SAT 1 WAY

SAT 2 WAY

-5

-10

-15

NPV analysis (10 years, 15% discount rate, 1st class free Internet)

30 kbps per individual user ≈ user experience of 1 Mbps

17

-15

-10

-5

0

5

10

15

5 10 15 20 25 30 35 40 45 50 55

NP

V [M

€]

Bandwidth per user [kbps]

UMTS

WIMAX

UMTS + WIMAX

WIMAX + UMTS

WiMAX STAT.

SAT 1 WAY

SAT 2 WAY

-5

-10

-15

NPV analysis (10 years, 15% discount rate, 1st class free Internet)

30 kbps per individual user ≈ user experience of 1 Mbps

18

Sensitivity results

-94%

2%

1%

1%

-1%

-100% -50% 0% 50% 100%

Bandwidth per user

Number of SIM cards per train

Second class adoption

Modal switch

Cellular bandwidth cost

CASE 1

51%

30%

-10%

4%

2%

-100% -50% 0% 50% 100%

Second class adoption

Bandwidth per user

Tariff per hour

Modal switch

Leasing percentage poles

CASE 5

Mobile networks

Due to the high bandwidth cost for UMTS

Full WiMAX network

More users + more bandwidth (less important with dedicated networks) = higher revenue

UMTS

WiMAX

19

Optimisations

Adapted rollout schemes

Heuristics (~ rolling out the right lines)

Based on number of passengers per train relation

Based on the route of a train relation

Based on interdependencies between train relations

Real options (~ rolling out on the right moment)

To introduce flexibility in the rollout time line

Rollout speed is adapted

20

Conclusions

Combination of technologies required

Dense railway network: UMTS + WiMAX

Rural railway network: Satellite solutions

Business case

Positive case in Belgium is possible

Influenced by many factors

User forecasting, rollout scheme, offered bandwidth

Business models

Role and participation of the partners important

21

Personal details:

Name:

Company:

Phone:

E-mail:

Bart Lannoo, Jan Van Ooteghem

IBBT – IBCN – UGent

+32 9 331 49 81

bart.lannoo@intec.ugent.be

jan.vanooteghem@intec.ugent.be

Thanks for your attention!