Mathieu Tahon

Evaluation of the techno-economic viability of point-to-point dark fiber access infrastructure in Europe

Upgrading telecommunications access networks requires large investments in deploying new optical infrastructure, especially in terms of construction works and costs to reach the end-user, which seem only affordable in densely populated areas. By evaluating a cost-benefit analysis for the deployment of a point-to-point dark fiber infrastructure, this paper investigates how the economic risk of dark fiber deployment can be estimated and/or reduced in different settings. By applying the model on specific scenarios, which differ in area type, demand uptake, and revenue scheme, it is concluded that the business case is only viablein adense urban area withan aggressive take-up. In the other scenarios, the paper investigates possibilities and opportunities to improve the business case and hence decrease the investment risk. Examples of this improvement include prolonging the planning horizon, ensuring revenue from the start of the project by performing demand aggregation, or examining where public funds might help.

Parking sensor network: Economic feasibility study of parking sensors in a city environment is well

Wireless sensor networks (WSNs) have a variety of purposes. They are mainly used for monitoring environmental factors, like CO2 concentrations, temperature and humidity. Other applications of sensor networks focus on detecting traffic parameters, e.g. passenger flows, damaged roads and traffic lights. This paper extends the current research with an economic feasibility of a real case, deploying a wireless parking sensor network in a city environment. After modeling the service adoption, the costs and revenues of the project are estimated. The static Net Present Value (NPV) case is already highly profitable. However, like most network projects, WSNs offer many flexibility options. A business case is extended with a Real Option Analysis (ROA), in order to quantify the value of the learning possibilities. We show that the built-in flexibility in the original project raises the attractiveness of the project.

Real Options in Telecom Infrastructure Projects — A Tutorial

The rapid technological change and uncertain future evolutions have a large impact on investment projects in the telecommunication sector. When new infrastructure networks are rolled out, the initial assumptions can prove to be untrue in the future, severely impacting the payoff. It is therefore extremely important that projects offer flexibility to allow the management to react to unforeseen changes. Management must, for example, be able to decide to speed up the project, slow it down, or even completely abandon it. However, the standard method used to evaluate investment projects, the Net Present Value analysis, is unable to capture the value of these different flexibility options. The Real Option concept, derived from financial literature, was proposed as a solution and implements this flexibility in the standard calculations. However, the Real Option Theory is only slowly getting accepted within the telecommunication sector. In this paper, we introduce the basics of real options theory and provide a practical methodology to apply real options to realistic telecom business cases. In addition, we will indicate why the characteristics of this sector make it very well suited to apply real options to investment projects. The rollout of fixed next generation access networks offers a broad range of growth options to the operator, e.g. additional network upgrades or the introduction of new services. Using real options allows one to compare the flexibility value of all these options.

Greening the Airwaves With Collaborating Mobile Network Operators

Base station sharing is currently considered one of the most promising solutions for reducing the energy consumption costs of cellular networks. This paper presents a game theoretic framework for the study of such cooperative solutions where different mobile network operators (MNOs) decide to switch off subsets of their base stations during off-peak hours and roam their traffic to the remaining stations. The solution is based on a detailed optimization framework that determines exactly which base stations should remain active and how much traffic each one of them should serve, so as to maximize the aggregate energy savings. Accordingly, using the axiomatic Shapley value rule, it is determined how the benefits from the cooperation, i.e., the cost savings, should be dispersed among the cooperating MNOs. It is proved that this coalitional game with transferrable utilities has a nonempty core, and thus there exists a cooperation solution that incentivizes the participation of all operators. Moreover, using a thorough numerical analysis, it is shown that the benefits achieved with the implementation of the cooperation strategy depend mainly on the power consumption characteristics of the MNOs, which in turn are related to the number, type, and technology of their base stations. Overall, the energy savings are found to be most sensitive to the technology of the used base stations, and more precisely to the no-load base station energy consumption which defines the energy waste in a network.

Valuing flexibility in the migration to flexible-grid networks [invited]

Increasing network demand is expected to put pressure on the available capacity in core networks. Flexible optical networking can now be installed to increase network capacity in light of future traffic demands. However, this technology is still in its infancy and might lack the full functionality that may appear within a few years. When replacing core network equipment, it is therefore important to make the right investment decision between upgrading toward flexible-grid or fixed-grid equipment. This paper researches various installation options using a techno-economic analysis, extended with real option insights, showing the impact of uncertainty and flexibility on the investment decision. By valuing the different options, a correct investment decision can be made.

Cost-Efficient NGN rollout

We introduce in this section potential business models for the deployment of optic fiber networks. Because Fiber-to-the-Home is deployed at a slower speed than expected, we describe the evolution in several European countries, identify the reasons of the differences, propose a holistic approach to improve the business, and present a game-theoretic model to evaluate the impact of municipality investments on the market.

Promoting Next Generation Network Investment Through Adapted Performance Indices

Broadband has been identified as a driver for economic growth, and the rollout of these networks is as such of key importance for Europe. Still, the observed rollout speed of NGAN networks is slower in Europe compared to the United States and Asia. The European Commission has identified this need and focuses on broadband coverage and high internet use penetration in its Digital Agenda for Europe. On national level, government and regulators have a twofold objective, translating this EU policy and stimulating competition in the retail market. Performance indices exist to visualize and quantify the performance of national and regional markets. These indices are typically used to show the historic performance of broadband markets. However, future oriented indices should be used to assess the impact of regulatory decisions on social welfare and on other market parties. We introduce such an index and show how it results in other regulatory outcomes compared with existing indices, in the case of wholesale access pricing.

Estimating the economic value of flexibility in access network unbundling

By means of local loop unbundling (LLU), the incumbent operator opens the access network connecting the customer to the central office to other operators. Other licensed operators (OLO) will use this possibility to provide customers their services. The price of the LLU-offer is set by a regulator, aiming to allow fair competition in a monopolistic market. This is typically fixed at the lowest possible price covering all of the incumbents costs in this network. Now, the OLO always has the choice between the regulated LLU-offer, own installation or not providing access to the customer. In order to remove any unfair competition advantages, the regulator should incorporate a flexibility bonus in its LLU-pricing strategy. In this paper we show how the economic technique of real option valuation can be used for estimating a numeric value for this flexibility advantage.