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    Planning for growth

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    Christer Friberg, technical sales manager GSM RAN, Ericsson, looks at the technical provisions for serving the next billion mobile users

    The number of mobile subscribers globally recently passed one billion, and is expected to reach two billion by the end of 2007. The vast majority of this subscriber growth — about 80% — will come from high-growth markets, in regions such as Eastern Europe, Central Asia, the Asia-Pacific region, the Middle East and Africa.

    In fact, growth in many of these regions is exceeding all expectations, with countries like Russia and the CIS states leading the way. In August alone, Russia itself added 3.1 million new mobile subscribers, following on from just over three million net additions in July and taking mobile penetration in the country to 38.4 per cent (source: sotovik.com). These kinds of growth rates look set to be repeated in other Eastern European and Central Asian markets. And as penetration rates increase, operators will be looking to expand their service offerings beyond the cities and other built-up areas into more remote and less populated areas.

    When building out or expanding radio networks in these markets, mobile operators may be tempted to deploy the lowest-cost radio solutions available, in order to minimize capital expenditure and maximize profitability. However, mobile communications needs change rapidly, and such low-cost infrastructure may not be able to scale or support future services. Taking a longer-term view and focusing on minimizing Total Cost of Ownership (TCO) will help operators reduce the overall cost of building and running the network while also maintaining high service quality and scalability to meet future subscriber and service expansion.

    The challenge of growth
    In new growth markets — whether in rural areas, or in towns and cities — the main focus is on increasing subscriber penetration. Often these new subscribers will come from a segment of the population that could not previously afford mobile telephony services or who previously lived outside mobile coverage. The big challenge here is to deliver mobile services at a lower level of average revenue per user (ARPU) while still maintaining profitability.

    New radio techniques are lending operators in high-growth markets a helping hand, by reducing entry barriers, maintaining profit margins and offering long-term adaptability. Several advances in GSM/EDGE and CDMA2000 radio solutions have been made specifically to tackle the challenge of delivering optimized radio coverage in regions where little or none exists today, in a cost-effective, low-risk way. They offer a cost-efficient entry solution, starting from just a few Radio Base Station (RBS) sites, that has the flexibility to expand capacity many times over within existing RBS cabinets to meet future traffic demands. 

    Through careful choice and implementation of their network solution, operators can reduce the cost per produced traffic minute by up to 50%, and open up opportunities to reach entirely new market segments profitably. Radio solutions specially adapted for high-growth markets can not only reduce actual base station costs by 10-20 per cent, but also reduce the number of radio sites by 30-50% over all. In addition, to optimize total cost of ownership from a whole network perspective, operators should also consider their approach for the core network, transmission network and service layer.

    Targeted radio solutions

    For most operators in high-growth markets, subscriber acquisition is the main route to profitability: more subscribers mean more revenues and better economies of scale. These new subscribers may be split into two main segments, each with their own specific characteristics, which can be targeted with different technical solutions.

    The first segment comprises subscribers in urban and suburban areas. Here, traffic and coverage already exist, and the key challenge is to add more subscribers when available spectrum is typically limited. For such ‘interference-limited’ areas, new Base Station Subsystem (BSS) radio features squeeze more traffic from limited radio spectrum by optimizing network, cell and channel capacity so that more carriers can be inserted into the radio network without jeopardizing radio quality.

    The second segment includes subscribers in rural areas, where traffic demand is unknown since there is no pre-existing coverage. Infrastructure investment here is commercially risky: there is no guarantee that it will be paid back. For such regions — characterized by smaller towns and villages and sparsely populated areas — there are efficient radio solutions that minimize the total number of RBS sites required.

    There is a common misconception that rural areas are best served with ‘low-priced’ equipment, in order to minimize business risk. However, it is advanced radio solutions that reduce the number of radio sites needed and minimize operation and maintenance requirements — while still offering room for expansion and development in the future. The key is to maximize the utilisation of the investment each radio sites demands. With advanced radio solutions, operators can cover larger areas, reach more potential subscribers and spread site costs across a larger subscriber base.

    Where savings can be made

    The two main cost elements in mobile networks are capital expenditure (CAPEX), which includes all costs related to initial investments, and operating expenditure (OPEX), which includes recurring network running costs.

    The lion’s share of mobile operators’ CAPEX — some 50-80% — is accounted for by network equipment, and most of this is related to the radio access network.

    A typical RBS site includes many different elements, and the cost for the RBS equipment itself is only one part of the total cost of installing a new site. There are significant costs related to the various resources and services required to install and commission the site, whether sourced internally or externally.  The actual costs of site materials and services vary according to local market conditions, but typically make up around two-thirds of the total cost for a complete radio site.
    Many of the OPEX items for an RBS site are easy to predict, as they are based on known costs for power consumption, transmission and site rental. However, there are some potentially large unknown costs resulting from the number of maintenance visits required, for example, to deal with faults.

    There are many potential failure points that require manual intervention at an RBS site, including batteries, air conditioning units and transmission equipment, to name a few. Such costs can be difficult to predict, since they include overall manning levels, the actual time personnel spend travelling to the site and equipment (vehicles, spare parts, etc.). The RBS is the most sensitive part on the site and it needs to be reliable and robust. An RBS configuration built using a low number of reliable units will help minimize unwanted sites visits. The best way to drive down the total cost of installing and running a radio network, therefore, is to reduce the number of sites needed and to deploy low-maintenance solutions.

    Balancing coverage and capacity

    While basic entry-level radio solutions may appear to be an optimum solution for sparsely populated rural areas, the configuration options available from more flexible RBS equipment enable operators to optimize radio network deployment to minimize the number of radio sites. Both the RBS’ ability to reach the phone (downlink) and to receive the weak signal from the phone (uplink) need to be considered during radio network planning. Recent advances in GSM/EDGE radio systems optimize downlink power and uplink sensitivity to suit various conditions, meeting all coverage and capacity needs in a cost-effective way, and making the best use of network investments. These include: Transmitter Coherent Combining (TCC), which extends down-link coverage by doubling RBS output power; Four-Way Receiver Diversity (4WRD), which extends up-link coverage by combining signals from four antenna branches, and; Smart Range, which offers scalable capacity in base station sites with large cell ranges.

    In combination, these techniques deliver much larger cell areas, reduce the number of radio sites required and cut CAPEX per square kilometre significantly — often by more than half.
    The scenario that follows illustrates how sa GSM operator can start deployment with large cells providing limited capacity, and add capacity over time as it is needed to meet new traffic demands, as shown in Figure 1 (above). It shows how an initial site with extreme coverage can have its capacity expanded more than ten-fold through the addition of transceiver (TRX) hardware and the efficient use of BSS software features.

    In the first step, coverage is maximized and initial investment is minimized by keeping the number of sites to a minimum. Double TRUs, or dTRUs, containing two TRX in one physical unit, can be configured as a single TRX with double the output power; performance can be further enhanced using four-receiver diversity in the uplink. As traffic demands grow, step 2 enhances capacity simply by the insertion of an additional dTRU per cell, enabling up to three times more subscribers to be served due to effects from trunking efficiency. No upgrade to the initial antenna and feeder system is required.  For step 3, no site visit is needed. From the operations centre, the second dTRU is configured back to a higher-capacity mode and three TRXs are provided per cell. Capacity is now more than five times the initial configuration. No changes to the site are required. An additional Dynamic Overlay/Underlay feature is introduced to provide traffic steering between the two layers in the cell with different coverage.

    Finally, step 4 can also be performed without a site visit and increases capacity to fourteen times the initial configuration. With load-based Dynamic Half-Rate, traffic channels can be allocated at a certain blocking threshold value. The Half-Rate feature enables two users to share the available resource in the cell with the compromise of some degradation of voice quality. At peak times, all connections might use the Half-Rate feature. As traffic levels grow even higher, operators have two options available for adding more capacity. One option is to add more macro RBS capacity by deploying additional RBS cabinets at the same site. The other is to deploy micro RBSs to offload macro cells. As the operator only has to make this decision once the traffic has grown sufficiently, the risk is removed from the investment and pay-back calculations are more certain.

    Taking the network view

    While it is radio network technology that offers the most significant potential for savings in total cost of ownership for operators in high-growth markets, it is important to take a holistic network view to derive maximum overall network efficiency and performance. This means taking the core network, transmission, service layer and service solutions into consideration as well.

    One important issue is the choice of transmission technology for extending, and expanding, coverage in high-growth areas — especially where demand is unpredictable and rapidly changing. Microwave transmission links offer a number of distinct advantages in these situations. As well as being faster and less costly to install than fibre, for example, microwave transmission systems also offer highly scalable capacity — ranging from 2Mbit/s to n x 155Mbit/s. With a break-even point of just below one kilometre, microwave transmission links typically reduce the main transmission cost by a factor of ten, when compared with fibre solutions. RBS units are now available with integrated microwave transmission, which can reduce overall capital costs by as much as 30 per cent. 

    A key contributor to profitability is the high utilization of radio network investment. By increasing the number of subscribers that can be served by each radio site, new radio solutions bring down the cost per produced minute, and enable operators to address new low-spending market segment profitably. Further, by taking a holistic network view, operators in high-growth markets can boost the efficiency and performance of their networks and optimize total cost of ownership.