DAB Network Architecture
Investments and cost drivers
ITU/NBTC Workshop
16 December 2014
Peter Walop
International Telecommunication Union
International
Telecommunication
Union
Presentation Overview
1.
Introduction
o
o
o
Scope
LRIC
Cost drivers
2.
CAPEX
3.
OPEX
2
1. Introduction
3
1. Introduction
– scope
•
Satellite distribution network
In scope:
o
Encoding in
studio
broadcaster
Recording
Editing
Studio feed (VPN)
Multiplex centre
o
Studio feeds
o
Encoding &
multiplexing of
Micro wave links studio feeds
Scheduling
Play out
broadcaster
Station Multiplexing
o
DAB+ compliant
Recording
services
Editing
Scheduling
Play out
o
Service providers
Distribution of
Transmission
Network operator(s)
= Network Access Point
= Point of Service
4
1. Introduction
•
– Long Run Incremental Costs
The cost of the (minimum) service comprises:
o
Capital expenditure (CAPEX) and Operating expenditure (OPEX) directly
relevant to the provision of (minimum) service;
o
Reasonable (??) return on capital, calculated on the basis of weighted
average cost of capital (WACC);
o
Common cost relevant to the business operation but cannot be directly
or indirectly allocated to minimum service – mark-up model (EPMU)
•
WACC can vary from 10% - 25% depending on the risk profile
o
Country and industry specific
o
Market structure and offer
o
Size of operations/company
5
1. Introduction
•
– cost drivers
For any terrestrial broadcast network the technical cost drivers are:
1. Network topology = Number of sites and power (ERP) per site
2. Number of multiplexes
3. Level of redundancy
•
In terms of service offering these drivers are:
1. Population and geographical coverage
2. Number of services, type and quality of service
3. Service availability/reliability
•
Service requirements should be matched with:
o
Business case (at industry level and per market player)
o
Finance capacity (risk profile)
o
Service deployment phases/timing of investments
6
2. CAPEX
7
2. CAPEX
– scenarios
DAB CAPEX Dashboard
Forecast
Total # sites
Theoretical
502
Number of National MUX (layer)
Number of Local MUX (layer)
Number of Local areas
4
4
39
Number of audio services in national ensemble Number of audio services in local ensemble 9
18
% greenfield sites
Redundant encoder
Redundant multiplexer
Redundant distribution
Redundant transmitter Pop coverage
95%
61,750,000
40%
National
yes
Local
yes
yes
no
yes
yes
Source: ITU
8
2. CAPEX
– network operator (in m$)
600
541
500
400
300
CAPEX per NO National
278
CAPEX per NO Local
Total CAPEX all networks
231
230
200
184
113
94
100
90
76
74
35
30
27.3
69
66
27
1
0.86
0.79
0.8
2.4
2
1.9
1.8
(1,1, mux r) (2,1, mux r) (3,1, mux r) (4,4, full r)
(1,1, mux r) (2,1, mux r) (3,1, mux r) (4,4, full r)
0
70‐80%
95%
Source: ITU
9
2. CAPEX
– service provider (in m$)
0.06
0.05
0.04
0.03
CAPEX per SP National
CAPEX per SP Local
0.02
0.01
0
(1,1, mux r) (2,1, mux r) (3,1, mux r) 70‐80%
(4,4, full r)
(1,1, mux r) (2,1, mux r) (3,1, mux r) (4,4, full r)
95%
Source: ITU
10
3. OPEX
11
3. OPEX
•
– categories
OPEX can comprise the following costs categories (design
dependent):
•
o
Distribution (satellite transponder rental)
o
Energy (feeding TX and cooling)
o
Floor and tower space (of Facility license holder)
o
Service & maintenance costs (including spares, staff & contracts)
o
License fees (NBTC)
OPEX is periodical cash-out and has a different risk profile for
investors
12
3. OPEX
•
– example
18 radio services/same coverage – energy savings
Source: Harris Broadcast
13