roianalysisofwifioffloading.pps

8/11/2019 ROIAnalysisofWiFiOffloading.pps

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© 2012 Wireless 20/20, LLC. – All rights reserved

ROI Analysisof

WiFi Offloading




To offload or not to offload…

Operators of mobile cellular data networks (3G and4G) face an uphill battle against increasing datausage and declining ARPUs

ROI on macro network expansions scrutinized byshareholders

iPhones, iPads, Android smartphones, netbooks are alltapping the mobile network for access anywhere,anytime

Majority of access occurs when the user is stationary inhigh traffic density areas (home, office, coffee shopetc.)

2…the bad news is…




3

Comscore found that

more than one th i rd

(37.2 p ercent) of U.S.

digital traffic coming

from mobile phonesoccurred via a WiFi

connection.

by Karl Bode Thursday 27- Oct 2011

Phil Marshall head of

Tolaga Research.

estimates that about

20 percen t of iPhone

traffic on AT&TMobility's network is

landing on the public

WiFi network, and it's

likely that another 60

percent is landing on

home WiFi networks

now that the operatorhas instituted tiered

data plans, he said.

“When you have WiFi,

you do more, and that

effect is pretty hard to

measure," Steve

Glapa, Rukus. "Butnonetheless, I would

say network traffic on

PCCW's network

would b e 20 percent

h igher than if it didn't

have WiFi. In some of

the dense traffic areasof Hong Kong, some

80 percent of d ata

traff ic is traveling over

WiFi”, he said

…the good news is WiFi offload

already occurs naturally…

http://www.dslreports.com/useremail/u/141383

http://www.fiercebroadbandwireless.com/

http://www.fiercebroadbandwireless.com/

http://www.dslreports.com/useremail/u/141383




65% of mobile data traffic already offloaded Users are in Wi-Fi coverage 63 percent of the time during the

day/

65 percent of traffic can be offloaded to Wi-Fi under typical

usage conditions using on-the-spot offload Greater offload performance can be achieved if the user is

prepared to accept delayed offload (e.g., sync your videos

or photos when you get home)

This means that out of the 7GB usage per month, 4.5GB would travel by

Wi-Fi and 2.5GB by cellular . Therefore a 2GB-3GB per monthcellular data plan is probably enough for most users.

4

…a fair assumption according to

Light Reading would be…

Observation: A cellular service provider already benefits from WiFi Offload

without making any investment in deploying a WiFi Network of its own.


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How do we quantify the offload dilemma?

How do we analyze the impact of a 3G/4G

Service Provider’s Own WiFi Offload Deployment

on its overall Business Case? Does it make economic sense to deploy a WiFi

Offload Network?

What is the Business Case for MNO WiFi Offload?

What is the ROI of an MNO WiFi Offload?

5

Answer: Develop a WiROI™ Model to answer these questions

…in-depth analysis required to

make informed decision…



Using a holistic approach

Study the Impact of WiFi Offload on an Urban LTE Deployment

Deploy an LTE network for Coverage

Deploy a WiFi Network for Capacity

Surgically place the WiFi AP’s in high traffic areas

Calculate the TCO (CapEx and OpEx) for the WiFi Offload Network

Compare to the TCO of providing Capacity by deploying LTE Cellsfor Capacity

Understand the key deployment parameters which lead to positiveeconomic impact of WiFi off load

Calculate and Compare ROI metrics such as NPV, IRR

6…the wireless 20|20 process…



Real time simulation and analysis

Allow the simulation of public wifi offload to vary the % of the naturaloffload

Allow the simulation model to vary the % of the Urban Area covered byWiFi

Allow the simulation model to vary the Density of WiFi AP’s per sq km Vary WiFi Vendor Equipment Performance and Price (Cell Radius of

AP’s, cost of AP’s)

Vary the WiFi Backhaul Cost

Vary the operating cost of the WiFi network

Vary the total data capacity a user consumes on a monthly basis

7…WiROI™ capabilities…

Objective: Discover under what conditions WiFi Offload pays off



Major Assumptions

One Time Costs (CapEx)

Cost of WiFi Access Point

Cost of WiFi AP installation

Cost of Backhaul Equipment Cost of Backhaul Equipment Installation and provisioning

WiFi Core Network Equipment (Servers, Portals, etc.)

Recurring Costs (OpEx)

Monthly WiFi and Backhaul Site Rental

Monthly WiFi and Backhaul Maintenance

Monthly Traffic Backhaul Cost

8…CAPEX and OPEX drivers…

Objective: Discover under what conditions WiFi Offload pays off

t i d l i f t ffi



Cover Areas of High Traffic Density

9

…customized analysis of traffic

density…



More AP’s per Sq Km provide better offload

10…and WiFi AP Density…




Coverage vs. Traffic Offload

11

Hotspot coverage ofhigh traffic densityareas versus

contiguouscoverage yieldsbetter offloadpercentage

Customized formulas

for different marketconditions

…coverage vs. traffic offload…

C ov

er a g e

0%

20%

40%

60%

80%

100%

120%

Traffic

T=C^(1/2) T=(1-C)^1/2-1 T=C^(1/3)




WiROI™ Research Analysis Case Study 1 – LTE Deployment on New York City

12




Baseline: New York City

13

NYC

8 million POPS

LTE using 1800Mhz

10Mhz Channel

Coverage 789 sq km

2,194,000 subscribers

216 Coverage Sites

1,879 Capacity Sites

Cumulative CAPEX $514M

Cumulative OPEX $3,006M

TCO $3,520M

Assumption: LTEdeployment in NYC

Activity: Simulate TCO

impact of implementingMNO WiFi OffloadNetwork

Identify: The scenario foroptimal financial return

Analyze: Understandmain drivers of theresults

…large dense urban city…




Assumptions: CapEx & OpEx

CapEx Assumptions WiFi AP LTE Macro Cell

Cost of 3-Sector BTS $45,000

Cost of WiFi Access Point $500

New Site Acquisition $600 $150,000

Collocation $50,000

Backhaul $300 $5,000

OpEx Assumptions WiFi AP LTE Macro Cell

Monthly Site Rental $20 $1,000

Site Maintenance/month

$10 $200

14…WiFi vs. LTE assumptions…

WiFi ffl d lt




$3,250

$3,300

$3,350

$3,400

$3,450

$3,500

$3,550

0% 20% 40% 60% 80% 100% 120%

Manhattan – WiFi AccessPoints per sq km

LTE TCO Baseline 24 AP's

42 AP's 60 AP's

78 AP's 96 AP's

120 AP's

Analysis: TCO impact of WiFi Offload

15

TCO savings of about $123malready with only 20% coverage

and density of 24 AP’s per sq km. Optimal TCO savings of $253m is

achieved with 100% coverageand 42 AP’s per sq km.

The number of macro LTEcapacity sites reduced by 1,447and replaced by 33,138 WiFi

access points.

…WiFi offload results…

TCO Savings $123m

TCO Savings $253m

Observation: Optimal Financial Return might not be Optimal Commercial Proposition

Optimal Commercial Proposition?

N Y k lt




Analysis: Optimal TCO Results

16

LTE Only WiFi Offload Delta % / $

Total CapEx $514m $284m 44.7% / $230m

Total OpEx $3,006m $2,983m 0.90% / $23mTCO $3,520m $3,267m 7.20% / $253m


Cumulative FreeCash Flow

$6,680 $6,967 4.3% / $287m

…New York results…




WiROI™ Research Analysis Case Study 2 – LTE Deployment in San Diego, USA

17

midsize urban city




Baseline: San Diego

18

San Diego

1.07 million POPS

LTE using 1800Mhz

10Mhz Channel

Coverage 250 sq km

206,330 subscribers

69 Coverage Sites

206 Capacity Sites

Cumulative CapEx $69M

Cumulative OpEx $396M

TCO $465M

Assumption: LTEdeployment in SanDiego

Activity: Simulate TCOimpact of implementingMNO WiFi OffloadNetwork

Identify: The scenario for

optimal financial return Analyze: Understand

main drivers of theresults

…midsize urban city…

WiFi offload results




$450

$460

$470

$480

$490

$500

$510

$520

$530

0% 20% 40% 60% 80% 100% 120%

San Diego - WiFi AccessPoints per sq km

LTE TCO Baseline 24 AP's

42 AP's 60 AP's

78 AP's 96 AP's

120 AP's

Analysis: TCO impact of WiFi Offload

19

TCO savings of about $10malready with only 20%coverage and density of 24

AP’s per sq km. Optimal TCO savings of $16m is

achieved with 40% coveragecoverage and 24 AP’s per sq

km.

At 40% the number of macro LTE

capacity sites reduced by 100and replaced by 2,400 WiFiaccess points.

…WiFi offload results…

TCO Savings $10m

TCO Savings $16m

Observation: Beyond 80% coverage you start to see diminishing returns

San Diego results




Analysis: Optimal TCO Results

20


Total CapEx $69m $55m 20.3% / $14m

Total OpEx $396m $394m 0.01% / $2mTCO $465m $449m 3.40% / $16m


Cumulative FreeCash Flow

$869 $888 2.2% / $19m

…San Diego results…



…test drive our WiROI™ 4G WiFi




WiROI™ Tool Demo

22

Test drive the WiROI™ Tool by register online at

www.wireless2020.com to gain access to our onlinedemo or contact us for a WebEx Demo.

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