Dimitris Katsianis

Economics of fixed broadband access network strategies

This article presents a comprehensive techno-economic evaluation of two upgrade strategy cases for broadband IP services for residential and business customers, and illustrates their respective merits and pitfalls, allowing the definition of a reasonable investment policy. The work should enable establishment of guidelines for broadband infrastructure upgrade strategies from the incumbent operators view. Following the definition of appropriate service sets, and taking into account demand scenarios established within the project, this work has been focused on developing a techno-economic model, based on the TONIC tool. Tariff structures have been applied to compute the key economic indicators, net present value, internal rate of return, and payback period. This investment analysis was carried using the tool, which was developed by IST-TONIC. The results show that the choice of technology (Ethernet or ATM) has almost no effect on the cost level and profitability of the cases. For the suburban area, a fiber to the cabinet solution is too expensive due to heavy infrastructure investments; for dense urban and urban areas the FTTC solution is worth the investments. The FTTH/office deployment scenario is only profitable in dense urban areas (>5000 potential customers/km/sup 2/) and already highly risky in the urban area.

Technoeconomic evaluation of the major telecommunication investment options for European players

This article summarizes the major results from European projects drawing final conclusions and recommendations from the technoeconomic evaluation of three telecommunications market studies. It presents an analysis addressing a wide range of crucial telecommunications questions debated today. The business cases are: seamless mobile IP service provision, 3G mobile virtual network operators (MVNO), and fixed networks for broadband IP services. Extensive market analysis has been carried out for modeling demand, penetrations, and tariff structures for new mobile services and broadband services as an input to the business cases. Results show that over a 10-year study period, UMTS business is profitable in most cases for established operators with reasonable market share. The 3G MVNO business case is profitable under typical conditions when MVNO yields about 10 percent penetration, depending on the country type. Provision of fixed broadband services with a fiber to the curb solution is viable in dense urban and urban areas, but not in suburban environments, while fiber to the home is viable only in dense urban areas, despite the selection of protocol (ATM vs. Ethernet). Furthermore, broadband wireless access (BWA) systems, in dense urban and urban areas, show quite promising economic results

On the Economics of 3G Mobile Virtual Network Operators (MVNOs)

The paper assesses the market conditions and dynamics, the architectures and the different approaches for deployment of 3G Mobile Virtual Network Operators (MVNOs), in an attempt to address specific advantages and pitfalls. Following the definition of appropriate service sets and tariff structures, and taking into account demand scenarios, a techno-economic model has been developed, in order to compute key economic indicators. The paper presents techno-economic results of specific business cases and deployment alternatives for an average “large” European country and a smaller, Nordic-type country. Fixed and variable costs have been identified and the business case shows how different service sets lead to different costs. Different MVNO business profiles have been investigated. Profitability for all scenarios and business profiles has been calculated, presented and discussed. Major opportunities and threats, as well as critical parameters and uncertainties have been identified through sensitivity analysis.

Techno-economic Evaluation of FTTC/VDSL and FTTH Roll-Out Scenarios: Discounted Cash Flows and Real Option Valuation

Due to the increasing demand in data rates telecom operators are faced with the question of when to upgrade their access network infrastructure toward fiber-to-the-home (FTTH). In this paper a techno-economic study of fiber-to-the-cabinet/very high bit rate digital subscriber line (FTTC/VDSL) and FTTH deployments is performed. The economics and risks associated with the incumbents decision to invest in dense urban and urban areas are analyzed using both discount cash flow (DCF) analysis and real options analysis (ROA). The results revealed that in the case of investment subsidization, the option value to expand in a later phase can significantly improve the financial metrics of the business cases. The analysis made is based on the ECOSYS techno-economic methodology and tool.

Business opportunities throughUMTS-WLAN networks

This article outlines the economic feasibility of mobile operators that combine nationwide mobility with 3G networks and hot spot coverage withWLANS, WLANS are based onHIPERLAN/2 architecture and theUMTS network exploitswCDMA/FDD technology. The evaluated business scenarios are focused on two different deployment areas, in terms of demographic characteristics and mobile penetration: a large and a small European country. The business case spans 2002 to 2011 withUMTS’ roll-out year in 2002 andWLAN’s in 2004, covering indoor hot-spot areas (stations, airports, stadiums, etc.) where demand is high. The demand for thisUMTS-WLAN roaming case is evaluated based on observations from Europe’s current mobile market and its evolution. Usage scenarios of different service packages corresponding to both residential and business markets have been taken into account. Direct investments and operational costs as well as revenue streams from traffic have been calculated. The methodology and the tool developed inACTS-TERA [1] andIST-TONIC [2] projects have been utilized for this case study. Economic conclusions have been derived, presented and discussed using key profitability factors. Profitability for all scenarios and business profiles has been calculated, presented and discussed. It includes a sensitivity analysis in order to identify the major opportunities and threats, for specific service sets as well as critical parameters and uncertainties. A wide audience from mobile operators and service providers to retail companies interested in entering the 3G market, can exploit this information.RésuméCet article souligne l’attrait pour les opérateurs mobiles que constitue la couverture des lieux publics à forte fréquentation par les réseauxRLAN en combinaison avec les réseaux 3G. les réseauxRLAN sont basés sur l’architectureHIPERLAN/2 et les réseauxUMTS sur la technologiewCDMA/FDD. Les scénarios économiques étudiés ont ciblé deux différents types de pays en terme de caractéristiques démographiques et de pénétration de la téléphonie mobile: un grand pays européen et un petit. Le plan d’affaire court sur 2002–2011 avec déploiementUMTS en 2002 et déploiementRLAN en 2004 pour la couverture des lieux publics à forte fréquentation tels que les gares, aéroports, stades, etc. où la demande est élevée. La demande dans ce modèle économique est estimée à partir de l’analyse du marché actuel de la téléphonie mobile en Europe et de son évolution. Les scénarios d’usage des différent services correspondant aux segments de marché entreprises et particuliers ont été pris en compte. Les investissements, le coût opérationnel ainsi que les revenus générés par le trafic ont été calculés. La méthodologie et l’outil développés dans les projets européensACTS-TERA etIST-TONIC ont été utilisés pour cette étude de cas. Les conclusions sont présentées avec une analyse de facteurs clés ainsi qu’une analyse de sensibilité incluant permettant d’identifier les principaux risques et opportunités.

Designing and Implementing an Open Infrastructure for Location-Based, Tourism-Related Content Delivery

The globally observed recession of mobile services market has pushed mobile network operators into looking for opportunities to provide value-added services on top of their high cost infrastructures. Latest advances in self and network-assisted positioning technologies, enable the provision of services that make use of the actual mobile user location. This paper presents the key points and considerations of a detailed approach for designing, developing and evaluating a very low-cost infrastructure, capable of providing tourism content related location-based services. The main effort is taken into allowing the potential integration of various market and technology stakeholders into such services, thus supporting open business models, while at the same time safeguarding end-user privacy.

Business prospects of wide-scale deployment of free space optical technology as a last-mile solution: a techno-economic evaluation

A technoeconomic evaluation of the business prospects of a wide-scale deployment of free space optical (FSO) technology as a last-mile solution is carried out. The evaluation is based on a technoeconomic tool that taking into account network topology, area characteristics, service demand, and price evolution forecasts, estimates key economic figures-of-merit. It is shown that FSO technology could provide a viable alternative in situations where the duct availability is limited, and fiber-to-the-home/office or fiber-to-the-cabinet scenarios have negative or less favorable business prospects. Hybrid fiber/FSO scenarios are also investigated taking into account different FSO coverage conditions.

Business modeling and financial analysis for Metropolitan Area Networks: Evidence from Greece

A sustainable business model is necessary for viable and future proof fiber-based Metropolitan Area Networks (MANs), in light of FTTH/O developments, which necessitate public initiatives, towards the leverage of broadband adoption. Following a detailed analysis and benchmarking of international practices, a pool of business solutions for the MANs development, especially for the Greek case, is presented. Taking into account pros and cons, a set of four appropriate business models is analyzed, and a quantitative financial analysis concludes the findings. Guidelines for the further development of these initiatives, useful for other countries with low broadband penetration, are presented and discussed.

Economics of Time and Wavelength Domain Multiplexed Passive Optical Networks

Passive optical networks (PONs) are being widely considered as a means to implement fiber-to-the-home (FTTH) and deliver broadband access to business and home users. However, technical and consequently regulatory and economic complexities arise in light of their deployment. In this paper, an evaluation of the business prospects of time division multiplexed (TDM) and wavelength division multiplexed (WDM) PON architectures for FTTH deployments under different rollout conditions is performed, based on the ECOSYS techno-economic methodology and tool. The importance of various cost components (fiber installation, optoelectronic components, etc.) is discussed. Using sensitivity analysis, the effect of various parameters such as duct availability, cost of civil works, etc. on the prospects of the investment are investigated. These results reveal several important techno-economic aspects that should be considered by telecom operators, regulators, and policy makers towards a successful FTTH deployment strategy.

Risks associated with next generation access networks investment scenarios

The deployment of next generation access networks (NGAs) is investigated from technical, regulatory and investment perspectives. A brief review of the possible network architectures and deployment scenarios of NGAs is provided. Risk calculations of these NGA scenarios are performed based on a fully detailed techno-economic model. Furthermore, the effectiveness of the European Commissions Recommendation on regulated access to NGAs, aiming to tackle the regulatory trade-off between encouraging investments and promoting competition, is discussed.