Optimizing LTE infrastructure upgrades and Capex

Broadband Traffic Management Congress, 16. Nov 2010

Dr. Kim Kyllesbech Larsen, Network Economics

Dirk Schöneboom, Network Economics

Technology, T-Mobile.

04/09/2023 2

Overview

Optimizing LTE infrastructure upgrades and Capex: For how long does an effective Traffic Management Architecture allow an operator to defer investing in more capacity?

Sweating network assets and using customer data to optimize network planning Controlling costs of network expansion without compromising customer experience Modelling future terminal penetration and projecting traffic migration to LTE Understand why LTE is no short-term saviour for operators addressing the capacity

crunch Traffic migration in spectrum limited operations

Summary

Optimizing LTE infrastructure upgrades and Capex: For how long does an effective Traffic Management Architecture allow an operator to defer investing in more capacity?

Sweating network assets and using customer data to optimize network planning Controlling costs of network expansion without compromising customer experience Modelling future terminal penetration and projecting traffic migration to LTE Understand why LTE is no short-term saviour for operators addressing the capacity

crunch Traffic migration in spectrum limited operations

Summary

04/09/2023 3

Starting point

Definition of Traffic/Bandwidth Management:

is the process of measuring and controlling the traffic on a network link, in order to avoid overfilling the link, which would result in network congestion and poor performance (source: Wikipedia)

Definition of Traffic/Bandwidth Management:

is the process of measuring and controlling the traffic on a network link, in order to avoid overfilling the link, which would result in network congestion and poor performance (source: Wikipedia)

Bandwidth

Mobile Data traffic evolution

todaytime

tomorrow

Traffic Management

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Typical upgrade steps for today’s RAN: SW upgrade Additional carrier Sectorization (6-sector site) Additional Site

Today's 3G networks can carry considerably more traffic with only incremental additional costs

Typical upgrade steps for today’s RAN: SW upgrade Additional carrier Sectorization (6-sector site) Additional Site

Today's 3G networks can carry considerably more traffic with only incremental additional costs

Sweating existing network assets C

ap

ex

SW upgrade extra carrier 6-sector site

RAN Capex per upgrade option

3G

LTE

new site new site

(co-loc)

Cost(incremental)

3G

LTE

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Typical user behaviour in today’s 3G network:

Understanding where and how these “heavy users” use network resources is a prerequisite for proper network planning. Network upgrades do not make sense for a small number of heavy users

Typical user behaviour in today’s 3G network:

Understanding where and how these “heavy users” use network resources is a prerequisite for proper network planning. Network upgrades do not make sense for a small number of heavy users

Using customer data to optimize network planning U

nit

u

sag

e

Datacard

Ø Data usage by terminal type

Other Smartpho

nes

iPhone Non-Smartpho

nes

Traffic demand concentration 50% of users account for > 95% of total

data traffic 10% of users account for > 70% of the

data traffic 1% of users account for > 25% of the

data traffic 0.1% of users account for > 10% of the

total data traffic

Traffic demand concentration 50% of users account for > 95% of total

data traffic 10% of users account for > 70% of the

data traffic 1% of users account for > 25% of the

data traffic 0.1% of users account for > 10% of the

total data traffic

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Typical traffic distribution in today’s 3G RAN:

Data traffic is very concentrated Only a small part of the network is actually facing capacity issues The majority of the network can easily accommodate the increase in data traffic Despite the strong growth in data traffic demand, network costs increase only

incremental

Typical traffic distribution in today’s 3G RAN:

Data traffic is very concentrated Only a small part of the network is actually facing capacity issues The majority of the network can easily accommodate the increase in data traffic Despite the strong growth in data traffic demand, network costs increase only

incremental

Controlling costs of network expansion tr

affi

c

Traffic distribution over sites

% of sites

Today

Tomorrow

Capacity limit (today)

3G data traffic

Network TCO

today tomorrow

Δ costs

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Don’t panic if throughput per user goes down…

….because this can be alleviated by traffic management measures

By introducing traffic management measures necessary RAN upgrades can be shifted in time, or even prevented altogether

Don’t panic if throughput per user goes down…

….because this can be alleviated by traffic management measures

By introducing traffic management measures necessary RAN upgrades can be shifted in time, or even prevented altogether

Controlling costs of network expansion without compromising user experience

Th

rou

gh

pu

t /

use

r

Cell BH throughput / user

acceptable limit

today

Action: RAN capacity upgradefuture

3G

LTE

3G

Th

rou

gh

pu

t /

use

r

Cell BH throughput / user

acceptable limit

today futureTr

affi

c M

an

agem

en

t

04/09/2023 8

Assumptions:

Result of terminal penetration modelling: In 2015 > 50% of the Datacard customers have LTE-enabled terminals In 2018 > 50% of the Smartphone customers have LTE-enabled terminals

Assumptions:

Result of terminal penetration modelling: In 2015 > 50% of the Datacard customers have LTE-enabled terminals In 2018 > 50% of the Smartphone customers have LTE-enabled terminals

Modelling future terminal penetration

LTE terminal penetration

100 %

2010 2012 2014 2016 2018 2020

50 %

Datacards

Smartphones

Year when LTE-terminals become

avaiable

Year when 50% of customers chose LTE-

enabled terminal

LTE Datacards 2011 2014LTE Smartphones 2013 2017

04/09/2023 9

Traffic migration from 3G to LTE:

When “peak 3G” will be reached, depends on LTE terminal penetration, LTE rollout, LTE frequency deployment band etc

It will take several years after LTE launch until 3G traffic stops growing

Traffic migration from 3G to LTE:

When “peak 3G” will be reached, depends on LTE terminal penetration, LTE rollout, LTE frequency deployment band etc

It will take several years after LTE launch until 3G traffic stops growing

Projecting traffic migration to LTE

Traffic per terminal technology

TB/month

Traffic per network

3G traffic peak (3G terminals)

2012 2013 2014 2015 2016 2017 2018 2012 2013 2014 2015 2016 2017 2018

3G traffic peak (3G Network)

3G

LTE

3G

LTETB/month

04/09/2023 10

Traffic per network:

Once we know “peak 3G”, we know when no more capacity upgrades are necessary for 3G From Capex perspective it would be best if 3G traffic demand would be stable over a longer period

Use traffic Management measures to “flatten out” the peak demand of 3G in order to minimize 3G Capex during traffic migration to LTE

Traffic per network:

Once we know “peak 3G”, we know when no more capacity upgrades are necessary for 3G From Capex perspective it would be best if 3G traffic demand would be stable over a longer period

Use traffic Management measures to “flatten out” the peak demand of 3G in order to minimize 3G Capex during traffic migration to LTE

Optimizing Capex spending during migration to LTE

TB/month

today time

3G

LTE

Traf

fic

Ma

nag

eme

nt

Mea

sure

s

TB/month

today time

3G

LTE

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How does the traffic FC translate into spectrum demand?

In which spectrum bands LTE can be deployed depends Spectrum demand of legacy technologies Licence duration of existing spectrum assets Availability of new spectrum

How does the traffic FC translate into spectrum demand?

In which spectrum bands LTE can be deployed depends Spectrum demand of legacy technologies Licence duration of existing spectrum assets Availability of new spectrum

Migration in Spectrum limited operations

Future Spectrum demand(Legacy technologies)

1800 MHz

900 MHz

2100 MHz

2600 MHz

Future Spectrum demand(LTE)

2010 2012 2014 2016 2018 2010 2012 2014 2016 2018

MHz

04/09/2023 12

Summary

Short-term investment in 3G is the most efficient way for network capacity upgrades

3G provides lowest incremental costs LTE is most cost efficient in long-term

LTE is no short term saviour for operators addressing the capacity crunch

3G traffic growth will reverse only several years after LTE launch

Utilize traffic management measures to flatten out the peak demand of 3G

Optimize Capex spend during traffic migration Full utilization of existing 3G assets

Short-term investment in 3G is the most efficient way for network capacity upgrades

3G provides lowest incremental costs LTE is most cost efficient in long-term

LTE is no short term saviour for operators addressing the capacity crunch

3G traffic growth will reverse only several years after LTE launch

Utilize traffic management measures to flatten out the peak demand of 3G

Optimize Capex spend during traffic migration Full utilization of existing 3G assets

Cost(incremental)

Cost/MB1

(total)

3G

LTE

Traffic

today time

3G

LTE

1 Note: Ultimately the absolute cost matters not the relative cost.

Thank You!