NETWORK
ECONOMICS
REPORT
NETWORK INNOVATION DRIVING
COST INTENSITY SAVINGS
MARCH 2019
NETWORK ECONOMICS REPORT
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NETWORK ECONOMICS REPORT
CONTENTS
Discover Innovation 2
Beta Labs Case Studies Summary 4
Enabling Neutral Host to accelerate 5
infrastructure sharing
Smart Padlocks: Willowmore 5
Innovative Fronthaul: SKT 6
FMC Based backhaul: China Telecom 6
Network Transformation through 7
Energy Efficiency: Turkcell
Battery Theft: Vodafone 7
Huawei RuralStar Solution: MTN Ghana 8
Green Base Station: NTT DOCOMO 8
Green Energy Consumption: Telefonica Mexico 9
How to get involved? 10
NETWORK ECONOMICS REPORT
DISCOVER
INNOVATION
2
NETWORK ECONOMICS REPORT
Operators are facing a Renewable energy is at the forefront of these
challenge, with revenues considerations, with solar and wind farms achieving
stagnating in many grid parity in many markets and costs continuing
markets. The 5G revenue to fall, operators are increasingly turning to these
opportunity is beginning solutions not only for economic reasons but also the
to crystallize but is still not sustainability agenda – responding to climate change
clear, and cost reduction has become a key area of interest especially through
has become a key priority. the UN Sustainable Development Goals.
Over the past 12 months, Densification means that the sheer number of sites
the GSMA Future or having to maintain 2G, 3G, 4G and 5G networks
Faisal Zia, Beta Labs
Networks Programme is likely to result in an energy increase, so operators
Lead, GSMA
has launched ‘Beta Labs’, should consider alternative models for commercial
which, through a series infrastructure-sharing, e.g. municipality-based neutral
of case studies, has profiled a number of cost intensity1 host models to share the cost. In addition, with IoT
innovation and strategy options. These case studies and hyper-connectivity, a new breed of service
have identified opportunities for operators highlighting providers will also require access to infrastructure.
a minimum cost intensity reduction average of 0.75%
per study, which for the validating operator equates At the core is data, looking at alternatives to the
to a total saving of approximately $450m2 (6.7%). traditional backhaul approach to extend fibre deep
into the network, such as using fixed wireless access
The reality is that there is no panacea or single and the passive optical network, which can create
solution for an operator, however, we have seen that a mesh networks reducing the need for sites and
combination of several innovations could cumulatively central offices but also bringing content closer to the
result in the overall improvement of network economics. consumer with multi-access edge computing (MEC).
Working closely with operators and a broad ecosystem
of partners, Beta Labs is building a library of tried and In the year ahead, AI & Automation will be added to
tested innovative solutions to give operators options to the roster of topics, as operators begin to digitally
improve their capital intensity. transform their networks.
If 5G is expected to deliver up to a thousand times as I’m often asked what will the networks of the future look
much data as today’s networks, the increased traffic, like – the answer is come to Beta Labs and find out.
processing and densification of networks may consume
up to two or three times as much energy. Beta Labs was
established with this in mind, as supportive action needs
to be taken to identify options to keep costs down and
unlock additional value from the network in the areas of
energy efficiency, infrastructure sharing and backhaul.
1
Cost Intensity defined as the CapEx +OpEx over revenue
2
Calculated on Operator reported financials at end of FY 17/18, based on hypothetical tier 1 operator
NOTE: Companies profiled, case studies and outputs from Beta Labs, including the network economic model
are provided for information purposes only and do not constitute an endorsement or recommendation.
3
NETWORK ECONOMICS REPORT
BETA LABS
CASE STUDIES
SUMMARY
Full details available at www.gsma.com/betalabs
4
NETWORK ECONOMICS REPORT
www.gsma.com/futurenetworks/ www.gsma.com/futurenetworks/
wiki/ccs-case-study wiki/willowmore-case-study
Enabling Neutral Host to accelerate Smart Padlocks: Willowmore
infrastructure sharing: CCS The Willowmore Smart Padlock provides enterprise-
This case study focuses on the cost-effective grade multi-role access control management platform
deployment of an alternative transmission solution, and smart padlock solution, to reduce the inefficient
provided by CCS, which enables more than two costs and time used to manage physical keys.
operators to use the same network infrastructure (i.e.
enabling the neutral host model). The example profiles Key highlights:
the City of London using MetNet small cells on existing • Reduces need for field staff to collect keys from
street furniture in partnership with Telefonica. field centres before a site visit.
• No physical keys, virtual keys and permissions are
Key highlights:
stored in a mobile application which can be granted,
• Enables the neutral host model: infrastructure can approved or rejected in real-time.
be leased to 3rd parties to create revenue and
• Allows Network Operating Centres (NOCs) and
indirectly share costs.
managers to track all access data and create
• Is easy to deploy and operate: City of London multiple roles for organisations, managers and 3rd
deployment was fully operational in 13 weeks. party contractors.
• Adapts to changing environment: Self-organising • Integrated task and access management system
and self-healing capabilities make the network allowing analysis of task frequency per site and
adaptable to the changing environment reducing benchmarking productivity of site engineers.
impact on operations and maintenance.
• Applicable to Fixed Wireless Access applications
opening new use cases.
5
NETWORK ECONOMICS REPORT
www.gsma.com/futurenetworks/ www.gsma.com/futurenetworks/
wiki/sk-telecom-case-study wiki/case-study-china-telecom
Innovative Fronthaul: SKT FMC Based backhaul: China Telecom
SKT focuses on the challenges and optimisation of the Small cell backhaul based on Passive Optical Network
transport demand by employing an innovative fronthaul (PON) system, that can reduce at least 80% of the trunk
transport network solution called 5G-PON (Passive fibre and 50% of associated fibre improving coverage
Optical Network). 5G-PON reduces the size of the and capacity are the focus of China Telecoms case study.
remote unit at the very last mile and supports the flexible
installation/configuration of the fronthaul networks. Key highlights:
• Small cell backhaul based on Passive Optical
Key highlights: Network (PON) system is proposed, which can
• Flexible and scalable installation: Can be mounted reduce at least 80% of the trunk fibre and 50%
above or below ground level. of associated fibre and facility room and air-
• Easy and flexible configuration: Not bound by the conditioner are no longer required.
location of its deployment. • China Telecom has conducted laboratory and field
• Plug & play: Auto tuning and wavelength locking test in Hubei City and Shanghai with Huawei and
features enable plug and play of new network nodes. ZTE. The test results proved the feasibility with
equipment and performance KPI’s satisfied.
• Pay as you grow: The use of passive nodes and
tuneable SFPs enable PAYG networks. • Backhaul based PON could be one of the preferred
choices for small cell backhaul transport.
• Intelligent operation management & analysis: Auxiliary
management and control channel enables the transfer
of information for intelligent operation & maintenance.
• Interoperability: Fully (Multi-Source Agreement)
compliant SFP enables interoperability with other
deployed systems in the network.
6
NETWORK ECONOMICS REPORT
www.gsma.com/futurenetworks/ www.gsma.com/futurenetworks/
wiki/turkcell-case-study wiki/vodafone-case-study
Network Transformation through Energy Battery Theft: Vodafone
Efficiency: Turkcell This case study focuses on battery pilferage from
Turkcell’s innovation highlights both the challenges and base stations, which is a key issue that affects mobile
optimisation delivered in their network transformation operators irrespective of their geographic location. The
project, where they used intelligent connectivity to solution is a GPS tracker concealed within the battery
significantly reduce the energy consumption across housing. Aside from CapEx investment required for
the network. re-securing the site and battery replacements, increased
OpEx costs as thefts interrupt the battery replenishment
Key highlights: cycle creating greater maintenance requirements.
• After evaluating actual loads and utilisation the
power system capacity was re-dimensioned to from Key highlights:
12kW to 9kW by reducing modules by 25% resulting • First in class innovation with no similar project
in ~20% CapEx saving. currently available on the market.
• By identifying excess power, Turkcell reallocated • Concealed GPS devices within the battery casing
7% of existing rectifiers and re-utilised them at new that is indistinguishable from standard.
sites identifying a CapEx saving. • When unauthorised movements detected, the GPS
• Battery backup requirements based on actual is activated and monitored remotely in real time.
availability targets and grid cut-off statistics, after • Early successes recorded, while some remain under
battery re-dimensioning on all sites, the number of active investigation, Vodafone’s solution led to the
batteries reduced by 20%. recovery a significant amount of batteries otherwise
• By modernising radio equipment, Turkcell observed written off.
an average reduction of 20% in energy consumption
keeping the same radio capacity.
7
NETWORK ECONOMICS REPORT
www.gsma.com/futurenetworks/ www.gsma.com/futurenetworks/
wiki/ruralstar-huawei-safaricom- wiki/ntt-docomo-case-study
case-study
Huawei RuralStar Solution: MTN Ghana Green Base Station: NTT DOCOMO
A cost-effective deployment of rural coverage, NTT DOCOMO has developed Green Base Stations, an
being a base station which can be constructed on environment-friendly and sustainable energy supply
a simple wooden pole instead of a 30m dedicated scheme for radio base stations.
tower, specifically designed to provide 2G and 3G
voice, data and other services (e.g. mobile money) Key highlights:
for rural communities. • Green Base Stations equipped with photovoltaic
(PV) panels, cycle-type Li-ion storage batteries with
Key highlights: smart power control.
• Easy installation and designed to provide • During power outage, sites can operate longer
connectivity to immediate surroundings of the using PV power generation rather than back- up
village so antenna mast is smaller and cheaper generator or batteries.
enabling wider coverage.
• Green Base Stations reduce the impact on the
• Connectivity to the main network via 4G base global environment and provide disaster-resilient
station relay transmission without using cabling or communication infrastructure.
physical connectivity: this is cheaper to install and
• NTT DOCOMO has solution in 133 base stations
more power-efficient
aiming to increase the penetration of the solution and
• Powered by solar energy with battery back-up for the PV generation capacity to 2,000 kW by 2020.
night-time – which saves on the capex and OpEx
costs of a diesel-powered generator.
8
NETWORK ECONOMICS REPORT
www.gsma.com/futurenetworks/ sustainabledevelopment.un.org
wiki/case-study-telefonica
Green Energy Consumption: Telefonica Mexico GSMA Beta Labs supporting the UN Sustainable
Through a PPA (Power Purchase Agreement), 40% of Development Goals
Telefónica México energy will come from Solar Energy, The UN Sustainable Development Goals (SDGs) are a
providing power to its stores and antenna bases. collection of 17 global goals set by the United Nations
Telefónica’s commitment is for all of the company’s General Assembly in 2015 for the year 2030. The
energy consumption to be 100% green by 2030. work the GSMA Beta Labs is doing through the case
studies in this document directly feed into a number
Key highlights: of these goals, namely Affordable & Clean Energy,
• Increases in network consumption and therefore Responsible Consumption & Production, Climate
energy cost, derived from the creation and increase Action and Industry, Innovation & Infrastructure. For
of base stations and commercial stores. more information about these goals, or to read into
• Increasing cost of energy and options to self- some of the specific areas mentioned previously, visit
generate energy not previously viable due to the link above.
security and high investment cost.
• Telefónica is committed to making all its energy
green by 2030.
9
NETWORK ECONOMICS REPORT
HOW TO GET
INVOLVED?
10
NETWORK ECONOMICS REPORT
Network economics will play a part in determining how quickly 5G networks
are rolled out around the world and the industry has a significant role to play
in supporting their deployment. Only by following a coordinated industry-wide
approach can we deliver the networks of the future.
Throughout the year Beta Labs has placed the Ultimately, the economics drives the speed of the
spotlight on three core areas; Energy, Backhaul deployment of MNO (Mobile Network Operator)
Relief and Infrastructure Sharing, all of which are not network and services, the case studies we cover later
only integral to the deployment of network services are a reflection of the emerging picture. As operators
but also drive much of the cost in networks. These move to more software defined virtualised networks,
areas also support a number of the UN Sustainable in FY2019/20, the Beta Labs will also consider disruption
Development Goals. and innovation in network automation and AI.
Beta Labs has developed a Network Economic If you would like to join the Beta Labs Innovator
Model (NEM) which first baselines existing network roster or to find out more information please
topology, and then iteratively overlays and profiles visit www.gsma.com/betalabs or contact
new, disruptive technologies or network management [email protected].
strategies that can deliver efficiencies or new
revenues. The modelling is then ratified via operator
review to evaluate their potential impact, and the goal
is to showcase the “best of the best”, and identify
collaborative actions to support operators.
11
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