As wireless operators seek to maximise their bottom line, the decision of how and when to invest more capex in order to minimise opex becomes a delicate balancing act, says Dr Ellen Gregory, associate director, Relate Technical Communications
There is no question that modern society has developed a taste for communications mobility: mobile telephone, mobile Internet, mobile television — the list keeps growing. Also growing is the volume of infrastructure required to support such services — and the associated costs of deployment. Whether the focus is second or third-generation (3G) cell-based wireless systems, operators in Europe are currently spending millions to optimise coverage, capacity, quality of service and/or functionality of their networks. In most cases, this means adding more base stations.
The sheer number of base stations required to support cellular systems demands huge up-front capital expenditure (capex) on the part of network operators. A seemingly minor price fluctuation, magnified by the total number of base stations (hundreds, even thousands) is, in reality, highly significant. It is not surprising, therefore, that operators are increasingly hard-nosed when it comes to infrastructure purchase. With the rise of the ‘e-auction’, where suppliers are invited to post their best prices online, many operators are unashamedly focusing on bottom-line cost rather than potential performance variables.
However, while operators may be reluctant to compromise cost for higher performance, they are not so blasé about ongoing operational expenditure (opex). It has been speculated that the lifetime opex of a base station can reach up to five times the initial capex and, as such, is a key factor in a commercial network’s profitability.
Yet, as operators seek methods of opex reduction, they are confronted by its inextricable link to capex and the need to determine the optimum balance between them. How exactly is capex related to opex? When is it justified to sacrifice one for the sake of the other? The variability in base station scenarios is enormous — depending on the size, location and configuration of base station, the range of services offered, and the impact of emerging complementary technologies. Ultimately, the trade-off equation is unique for each individual network.
Site negotiation headaches
According to Davide Momich, Radio Infrastructure Engineer with global wireless operator Orange, an increasingly significant contributor to capex — added to equipment purchase and civil works — is site acquisition. As one of the operators at the forefront of European universal mobile telecommunication system (UMTS) deployment, Orange is currently focused on the first phase of network roll-out — and that means expanding coverage.
“We’re not so focused on opex right now. That will come as UMTS network traffic increases,” says Momich. “For us a major challenge at the moment is streamlining site acquisition. In dense urban environments, particularly where there are historical buildings, it’s very difficult. Much less than half our site negotiations are successful — and we have to include all the time and expense of each failed negotiation in the overall capex.”
More and more, the essential factor is the visual impact of the antenna system installation, Momich says. For a successful new site negotiation, the solution must be low-profile and environmentally friendly. Where a prospective UMTS site is already in use for Orange’s dual-band 900/1800-MHz global system for mobile communications (GSM) network, the negotiation is usually easier, since a multi-band antenna can be introduced to maintain the number of antennas. However, as existing leases become due for renegotiation, many site owners are demanding a rationalisation of site infrastructure; in some cases, they are even refusing to renew contracts.
To ease such site negotiation headaches, low visual impact antenna systems are in much demand. “We’re looking for integrated solutions, where all tower-top components are encased within the radome of the antenna,” says Momich. “This includes tower-mount amplifiers (TMA), remote tilt control systems, multiplexers — whatever is necessary to meet the requirements of the site owner. We’re also looking at tri-sector antenna clusters.”
Environmentally friendly antenna installations can also help to reduce ongoing site lease costs — one of the key contributing factors to opex — says Patrick Nobileau, Vice President Base Station Antenna Systems with wireless technology group, Radio Frequency Systems (RFS). This is where multi-band antennas can be an advantage. “The weight, size and shape of a dual-band antenna is very close to a single-band antenna,” Nobileau says. “There is also the option to use a triple-band antenna, supporting 900, 1800 and 2100-MHz services, for very important sites being migrated to UMTS.”
In addition, installations incorporating integrated components such as TMAs offer the advantage of having been assembled in a controlled, clean environment. “You need jumper cables and connectors between the antenna and the TMA,” says Nobileau. “Assembling these on a rooftop at the whim of the weather is obviously not the ideal situation. Pre-assembly ensures the entire system is interconnected in the best possible environment for superior reliability and speed of installation.”
Network optimisation
In addition to equipment maintenance and site lease costs, the main contributors to base station opex are utilities (mainly electricity), backhaul options (such as line rentals), and the varied costs associated with network optimisation. This last, says Momich, is destined to have huge impact for 3G networks as traffic increases over the next year or so.
“We are looking closely at network optimisation techniques — remote antenna tilt control options are, as a matter of fact, ready; control over the antenna’s horizontal pattern shall follow next,” Momich says. It is widely acknowledged that 3G services such as real-time video transmission can lead to dramatic and unpredictable cell traffic-loadings, resulting in the need for dynamic cell adjustment. “Besides dramatically increasing optimisation process flexibility, remote antenna tilt control eliminates the need for a ‘cherry picker’ or tower climber to reset the tilt. Such manual tilt adjustments can get quite expensive, so remote tilt offers significant ongoing reductions in opex.”
In fact, says Nobileau, the capex associated with installing RFS remote tilt control technology can be offset by a single manual adjustment — assuming typical costs for the hire of a hydraulic lift and two-person team.
Furthermore, loss of revenue due to a site being down during a manual tilt operation needs to be considered. Since it has been speculated that some 3G sites might require regular tilting — even on a daily basis — the opex savings associated with remote tilt control are potentially enormous.
Choice of antenna also plays a role in ease of network optimisation and associated opex. Not only is tight antenna pattern control important to minimise interference, but the impact of excessive cell sector overlap is predicted to be detrimental to the efficiency — and capacity — of UMTS networks.
“We are still waiting for the results of traffic analysis, but it looks as though a 65-degree horizontal beam-width will lead to excessive UMTS sector overlapping in dense urban environments,” Momich says. “This is because handsets located within the cell’s overlapping region are in a perpetual state of handover, demanding resources from both sectors simultaneously. To combat this, we’re considering reducing the azimuth down to 55 degrees, maybe even 45 degrees, to optimise both coverage and capacity.”
Momich also says that increased antenna downtilt will be required as cell dimensions reduce. “Right now, in dense urban areas the average radius for a cell is about 200 to 250 metres, where downtilt is typically at about eight degrees. We’re right now looking for antennas with downtilt range from four to 14 degrees,” he says.
Gaining ground
Strategies to expand cell coverage — and thereby minimise the number of base stations required to service a given area — are of interest to operators as a means of capex reduction. However, simply increasing the base station output power to compensate is not necessarily beneficial to opex, since power consumption escalates dramatically on the basis of power amplifier efficiency and associated air conditioning of the housing.
Nobileau suggests that high-gain antennas are a possible alternative. Without any increase in base station output power, adopting an antenna with 21-dBi gain — as opposed to 17 dBi — can result in a 30 per cent reduction in the number of required base stations to achieve a specific coverage. “Alternatively, high-gain antennas could be installed at a lower altitude,” he says. “This offers capex savings associated with the tower structure and also the length of the cable feeding the antenna.”
While Momich applauds the benefits of high-gain antennas in principle, he explains that the limiting factor in their application is the physical dimension of the antenna. Even at European UMTS frequencies (2.1 GHz), high-gain (21-dBi) antennas are around two metres in length — visually far more prominent than the 1.4-metre antennas otherwise used.
“The important thing for deploying high-gain antennas will be the integration of all the other components within the two-metre radome in order to minimise the visual impact,” Momich says. “We shall consider an integrated cluster solution that has room inside the structure for a high-gain antenna. We would then be able to use it, which would be good from a technical point of view.”
Another means of extending the coverage of a particular cell is the use of tower-top amplification equipment. It is widely accepted that TMAs, in particular, will be mandatory for 3G networks, primarily to improve the uplink link budget, where the main benefit is increased bit rate. Boosters — which amplify both the uplink and downlink — can be used to bolster network coverage area and capacity, although are not typically observed in UMTS networks.
Clearly the capex/opex balancing act is complex and dependent on many parameters. Moreover, the decision of when to increase capex in order to improve opex is one that all operators approach differently. For example, while some operators acknowledge the merit of remote antenna control systems and have developed a deployment strategy, others have stated they will most likely deploy them only at sites where access is particularly difficult or costly.
Nobileau cites another interesting capex/opex equation as that encountered by a major US operator deploying a UMTS 1900-MHz network as an overlay to its existing dual-band 850-MHz and 1900-MHz network. Here, the target is to provide UMTS coverage through utilising exactly the same base station sites as the existing network — including extensive feeder cable sharing — thereby obviating the need to deploy new UMTS sites. This undeniable capex saving is offset by the need for a complex and unique base station architecture — incorporating diplexers, TMAs, dual-band antennas, RF filters — in order to ensure that the resulting services provide comparable coverage.
Despite the current focus on UMTS network coverage expansion, Momich and his team also have their sights set on the future. “Right now we’re facing the matter of coverage, but in another year we’ll face increasing traffic for new services and the ‘killer application’ for UMTS,” he says. “It’s more than network optimisation; there’s also a measure of ongoing reassessment and redesign — including the provision of indoor coverage for premises such as shopping centres and office buildings.”
An element predicted to have an impact on the capex/opex equation is the remote RF head — where the RF section of the Node B is re-located to the tower top and fed by optical fibre from either the bottom of the tower, or even a centrally located signal processing unit. “This will add network management flexibility and is probably one of the next steps for us; but it’s still some years off,” says Momich.
The relationship between base station capex and opex — whether considered a ‘delicate balance’, ‘complex equation’, or ‘sweet spot’ — is unquestionably dynamic. Cellular networks themselves have been described as organic, so it is perhaps not surprising that the financial bottom line is as difficult to pin down.
Certainly operators are confronted by the need for ongoing base station deployment — whether to improve coverage or capacity — while maintaining good quality of service under network load. Yet, although keeping a close eye on capex is necessary to ensure the resources are present for infrastructure deployment, the lifecycle costs of running a base station are forcing operators to focus more closely on opex. At the end of the day, operators will make their own decisions as to when increased capex is merited and when it is not. And each time it will likely be judged on a case by case basis.
