ITUITU-D Regional Development Forums 2010 on
NGN and Broadband for the Arab Region
“NGN and Broadband, Opportunities and Challenges”
Challenges”
Session 9
Case Study on Economic Impact
of Broadband Implementation
Ignat Stanev
HCTP/ITC, Bulgaria
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 1
Content of the presentation :
Economic Impact of Broadband
Implementation
Problem 1 – Service bandwidth upgrade
on FTTH broadband access network
on xDSL broadband access network
Problem 2 – Selection of broadband access
technology
xDSL vs. FTTH for urban brownfield area
FTTH vs. WiMAX for urban greenfield area
xDSL vs. WiMAX for rural area
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 2
1
Problem 1 – Service bandwidth upgrade
There is a need to model the impact of
upgrading the service bandwidth bandwidth, the
service take rate and the service mix on the
access network.
For a given market, the access network planners
want to perform Bandwidth Upgrade Scenarios,
Uptake Growth Scenarios, and Service Mix
Scenarios
The access network planners have to dimension
the required capacity of the access nodes, to
optimize the access network and to calculate
related costs to upgrade it.
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 3
Speed and bandwidth statistics related to
service upgrade
Offered broadband connection
– by price and speed
Average advertised vs.
actual download speed
Source : OECD,
TeleGeography,
Point Topic
Source :
OECD 2009
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 4
2
Service bandwidth upgrade – example I
Service:
Service:
Normal :
Service:
Upgraded:
Service:
Service utilization is presented
by the Contention Ratio
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 5
Service bandwidth upgrade – example I
Bandwidth per service ( Mbit/s )
<- Normal
3500
3000
2500
2000
1500
1000
FTTH-BUS
FTTH-RES
FT
TH
1
FT
TH
3
FT
TH
5
FT
TH
7
FT
TH
_2
FT
TH
_4
FT
TH
_6
FT
TH
FT _8
TH
_1
0
FT
TH
_1
2
500
0
Bandwidth per service ( Mbit/s )
FTTH – Home locations
7000
6000
5000
4000
3000
2000
FTTH-BUS
FTTH-RES
Upgraded:
ITU-D Forum
FT
TH
1
FT
TH
3
FT
TH
5
FT
TH
7
FT
TH
_2
FT
TH
_4
FT
TH
_6
FT
TH
_8
FT
TH
_1
0
FT
TH
_1
2
1000
0
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 6
3
Service bandwidth upgrade - example I
Service
Areas and
Sites
Data
connectivity
FTTHBus
FTTH-Res
FTTH1
0
0
3750
FTTH2
0
0
2972
FTTH3
0
0
2819
FTTH4
0
0
3775
FTTH5
0
1900
0
FTTH6
0
0
2041
FTTH7
0
0
805
FTTH_1
0
0
15
FTTH_2
0
0
30
FTTH_3
0
20
0
FTTH_4
0
0
45
FTTH_5
0
0
60
FTTH_6
0
40
0
FTTH_7
0
20
0
FTTH_8
0
0
60
FTTH_9
0
0
30
FTTH_10
0
40
0
FTTH_11
0
60
0
FTTH_12
0
ITU-D Forum
0
60
2080
16462
<- Normal
Bandwidth
per service
( Mbit/s )
Bandwidth
increase :
100 %
Service
Areas and
Sites
Data
connectivity
FTTHBus
Upgraded
FTTH-Res
Upgraded
FTTH1
0
0
7500
FTTH2
0
0
5944
FTTH3
0
0
5638
FTTH4
0
0
7551
FTTH5
0
3800
0
FTTH6
0
0
4081
FTTH7
0
0
1609
FTTH_1
0
0
30
FTTH_2
0
0
60
FTTH_3
0
40
0
FTTH_4
0
0
90
FTTH_5
0
0
120
FTTH_6
0
80
0
FTTH_7
0
40
0
FTTH_8
0
0
120
FTTH_9
0
0
60
FTTH_10
0
80
0
FTTH_11
0
120
0
FTTH_12
0
0
120
4160
32923
Upgraded:
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 7
Service bandwidth upgrade - example I
<- Normal
(3 OLT, 17 Splitter 1:8,
89 Splitter 1:4)
Access
Network
Dimensioning/
Optimization
Upgraded:
(3 OLT, 28 Splitter 1:8, 93 Splitter 1:4)
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 8
4
Service bandwidth upgrade – example I
Normal services :
10/1/2008
10/1/2009
10/1/2010
10/1/2011
10/1/2012
Acquisition
714006
6851
12354
7825
10450
Installation
27001
685
1235
783
1045
Maintenance
11364
11704
12320
12709
13230
Costs :
Upgraded services :
10/1/2008
10/1/2009
10/1/2010
10/1/2011
10/1/2012
Acquisition
814089
5072
2165
5437
23187
Installation
32651
56
25
100
74
Maintenance
14172
14198
14208
14256
14293
Difference :
10/1/2008
10/1/2009
10/1/2010
10/1/2011
10/1/2012
Acquisition
100082
-1779
-10189
-2388
12737
Installation
5650
-629
-1210
-682
-971
Maintenance
2809
2494
1888
1547
1063
Costs increase :
1.16 %
(relative to all costs)
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 9
Service bandwidth upgrade – example I
CAPEX
900000
800000
700000
600000
500000
400000
300000
200000
100000
0
Costs :
Normal
Upgraded
Difference Upgraded-Normal
120000
2008
2009
2010
2011
2012
100000
80000
OPEX
60000
CAPEX
40000
OPEX
20000
16000
14000
0
12000
-20000
10000
2008
2009
2010
2011
2012
Normal
8000
Upgraded
6000
4000
2000
0
2008
ITU-D Forum
2009
2010
2011
2012
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 10
5
Service bandwidth upgrade – example II
BUS
Service:
Service:
Normal
Upgraded
Upgraded:
RES
Service:
Service:
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 11
Service bandwidth upgrade – example II
Average Bandw idth per Service (for 10/1/2008)
<- Normal
120
in Mbit/s
100
Data connectivity
80
Internet-bus
60
Internet-res
40
IPTV
20
POTS
0
_1
0
_0
9
VoIP
CC
_0
8
CC
_0
6
_0
5
_0
7
CC
CC
CC
_0
4
CC
CC
_0
2
_0
3
CC
CC
CC
_0
1
POTS (ADSL)
Service Areas and Sites
Average Bandwidth per Service (for 10/1/2008)
Data connectivity
500
CC – Copper Cabinets
Data connectivity upgrade
x2
Internet-bus
450
400
in Mbit/s
350
Internet-res
300
250
IPTV
200
150
IPTV Upgrade x 2
100
50
POTS
Upgraded:
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
_1
0
_0
9
Service Areas and Sites
POTS (ADSL)
CC
CC
_0
7
_0
8
CC
_0
6
CC
_0
5
CC
CC
_0
3
_0
4
CC
_0
2
CC
CC
CC
_0
1
0
VoIP
Session 9_IS - 12
6
Service bandwidth upgrade - example II
Service Areas and
Sites
Data
connectivity
Internet-bus
Internet-res
IPTV
POTS
(ADSL)
POTS
VoIP
CC_01
0
0
14.4
28.8
0.306
0.153
0
CC_02
0
0
22
44
0.4675
0.23375
0
CC_03
0
0
54.4
108.8
1.156
0.578
0
CC_04
0
0
38
76
0.80325
0.40375
0
CC_05
0
0
26.4
52.8
0.561
0.2805
0
CC_06
0
0
32.4
64.8
0.6885
0.34425
0
CC_07
0
0
4.8
9.6
0.09775
0.051
0
CC_08
0
0
8.4
16.8
0.1785
0.08925
0
CC_09
39.6
29.7
0
0
0
0
0.561
CC_10
64.8
48.6
0
0
0
0
0.918
Total :
104.4
78.3
200.8
401.6
4.2585
2.1335
1.479
Upgraded:
Bandwidth
increase :
298.0%
ITU-D Forum
Service Areas and
Sites
Data
connectivity
upgrade x 2
Internet-bus
Internet-res
IPTV
Upgrade x
2
<- Normal
Bandwidth
per service
( Mbit/s )
POTS
(ADSL)
POTS
VoIP
CC_01
0
0
14.4
115.2
0.306
0.153
0
CC_02
0
0
22
176
0.4675
0.23375
0
CC_03
0
0
54.4
435.2
1.156
0.578
0
CC_04
0
0
38
304
0.80325
0.40375
0
CC_05
0
0
26.4
211.2
0.561
0.2805
0
CC_06
0
0
32.4
259.2
0.6885
0.34425
0
CC_07
0
0
4.8
38.4
0.09775
0.051
0
CC_08
0
0
8.4
67.2
0.1785
0.08925
0
CC_09
178.2
29.7
0
0
0
0
0.561
CC_10
291.6
48.6
0
0
0
0
0.918
Total :
469.8
78.3
200.8
1606.4
4.2585
2.1335
1.479
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 13
Service bandwidth upgrade - example II
<- Normal
(3 MSAN)
Access Network
Dimensioning/
Optimization
Upgraded:
(5 MSAN)
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 14
7
Service bandwidth upgrade – example II
Normal services :
Costs :
Acquisition
10/1/2008
10/1/2009
10/1/2010
10/1/2011
10/1/2012
Total:
1906829
21110
23120
20110
17900
1989069
Installation
39797
2090
2300
1990
1780
47957
Maintenance
270064
271124
272294
273304
274214
1360998
10/1/2008
10/1/2009
10/1/2010
10/1/2011
10/1/2012
Total:
1971873
13720
15070
16860
13070
2030593
Upgraded services :
Acquisition
Installation
47283
1440
1570
1760
1370
Maintenance
273807
274547
275347
276247
276947
53423
1376893
Difference :
10/1/2008
10/1/2009
10/1/2010
10/1/2011
10/1/2012
Total:
Acquisition
65044
-7390
-8050
-3250
-4830
41524
Installation
7486
-650
-730
-230
-410
5466
Maintenance
3743
3423
3053
2943
2733
15895
Costs increase :
(relative to all costs)
ITU-D Forum
1.85 %
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 15
Service bandwidth upgrade – example II
CAPEX
Costs :
2500000
2000000
1500000
Normal
Upgraded
1000000
Difference Upgraded-Normal
500000
0
2008
2009
2010
2011
2012
OPEX
1600000
1400000
1200000
1000000
80000
70000
60000
50000
40000
30000
20000
10000
0
-10000
-20000
CAPEX
OPEX
2008
2009
2010
2011
2012
Normal
800000
Upgraded
600000
400000
200000
0
2008
ITU-D Forum
2009
2010
2011
2012
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 16
8
Extension of the service bandwidth
upgrade studies
There is a need also to assess the cost for services in
order to price products. Such study facilitates
comparison of multiple service costing scenarios for
strategic decisions on product pricing.
Additional parameters are:
• price per service/bundle of services
• growth in customers from each service class
• growth in customers from each speed package
The planner have to dimension the access network,
to calculate all related costs and based on the
expected revenue to providing insight into the
Return-on-Investment and the profitability.
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 17
Problem 2 – Selection of Access
Technology
Aim is to investigate the technoeconomical impact of various access
technologies on the network for a given
market
Multiple techno-economical studies are
carrier out for the purpose to determine
the optimum access technology for the
network
Selection is done by comparison of the
economical parameters for each access
technology
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 18
9
Broadband access technologies
Application of different broadband technologies
IP
Source : OESD 2008
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 19
Broadband access – market share by technology
Broadband subscriptions
in Japan
Broadband
subscriptions in France
Source : Japan MIC
Source : ARCEP
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 20
10
Low
subscriber
base
Planning guidelines for broadband access
technology
Y
Wireless
*
N
Is area
Greenfield
pocket within
Brownfield?
N
Is there high
growth for
service
demand?
Sample guidelines
N
Y
Y
Is existing
MSAN
capacity &
BB reach?
N
OLT exists or
planned?
Y
FTTH
**
N
Y
Temp BB
wireless / Plan
OLT
Access Network Planning
Roadmap
Extend network
from MSAN
Access Network Planning
Guidelines
Source : STC
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 21
Example I – urban area brownfield
xDSL vs. FTTH brownfield
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
xDSL
Session 9_IS - 22
11
Example I – urban area brownfield
List of material :
Node
Description
Node Name
CO_Ubhur
Part Number
OLT
Splitter 1:32 _1
Splitter 1:32 cost
Splitter 1:32 _2
Splitter 1:32 cost
Splitter 1:32 _3
Splitter 1:32 cost
ITU-D Forum
Description
Total
Number
New
Total
Number
Existing
FTTH
Total
New Cost
Date
1
1922600
October 01,2008
0
250400
October 01,2009
0
250400
October 01,2010
0
250400
October 01,2011
0
250400
October 01,2012
2
1220
October 01,2008
0
60
October 01,2009
0
60
October 01,2010
0
60
October 01,2011
0
60
October 01,2012
2
1220
October 01,2008
0
60
October 01,2009
1
670
October 01,2010
0
90
October 01,2011
0
90
October 01,2012
5
3050
October 01,2008
0
150
October 01,2009
1
760
October 01,2010
0
180
October 01,2011
1
790
October 01,2012
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 23
Example I – urban area brownfield
xDSL vs. FTTH brownfield
UC_1_9a UC_1_1-3
Net Present Value
3000000
2500000
2000000
USD
1500000
FTTH
UC_1_9a
1000000
UC_1_1-3
xDSL
500000
0
10/1/2008
10/1/2009
10/1/2010
10/1/2011
10/1/2012
-500000
-1000000
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 24
12
Example II – urban area greenfield
FTTH vs. WiMAX greenfield
FTTH
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 25
Example II – urban area greenfield
WiMAX
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 26
13
Example II – urban area greenfield
FTTH vs. WiMAX greenfield
UC_1_9c UC_1_9b
Net Present Value
500000
400000
300000
200000
USD
UC_1_9c
WiMAX
UC_1_9b
FTTH
100000
0
10/1/2008
10/1/2009
10/1/2010
10/1/2011
10/1/2012
-100000
-200000
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 27
Example III (a) – rural area
xDSL vs. WiMAX rural area
xDSL
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 28
14
Example III (a) – rural area
WiMAX
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 29
Example III (a) – rural area
Net Present Value
Rural area -Tskneti-WiMAX-b-Year2; IRR=86.4%; Rural area -Tskneti-xDSL-Year2; IRR=0%
20000
xDSL vs.
0
WiMAX
in Euro
-20000
rural area
Rural area -Tskneti-WiMAX-b-Year2
-40000
Rural area -Tskneti-xDSL-Year2
-60000
-80000
-100000
1
ITU-D Forum
2
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 30
15
Example III (b) – rural area
xDSL vs. WiMAX rural area
xDSL
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 31
Example III (b) – rural area
WiMAX
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 32
16
Example III (b) – rural area
xDSL vs.
WiMAX
rural area
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 33
Improvement of the selection of access
technology studies
Present core network portion in the
network expenses :
• as additional average cost per customer
• as total additional cost, related to the
uppermost access network node
Present additional costs related to running
the business ( marketing of services,
customer care, etc.) :
• as additional average cost per customer
• as total additional cost, related to the
uppermost access network node
ITU-D Forum
Cairo, Egypt, 13 to 15 December 2010
Session 9_IS - 34
17