Analysys Mason & AIRCOM study reveals Hybrid SON architecture could also deliver to operators an EBITDA boost of 5% per year
Leatherhead UK – Thursday 9th February 2012 – AIRCOM International, the leading independent network planning and optimisation solutions provider, today releases exclusive findings from a study undertaken in partnership with independent telecoms analysts, Analysys Mason. The study identifies the commercial benefits that hybrid SON architecture could deliver to mobile operators, across both 3G (UMTS) network environments today and across LTE networks in the future.
The study findings are based on a clearly defined cost model created by AIRCOM and independently validated and endorsed by Analysys Mason. The calculations explore the advantages that hybrid SON could deliver to mobile operators over three years. Through upgrades to existing UMTS infrastructure, and by also applying them to modest LTE deployments (across 20% of cell sites), hybrid SON could:
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On average, reduce total cost of network deployments and operations (CAPEX and OPEX) by more than 25% – for large operators in Europe, this figure could be as large as 50% as economies of scale dominate in dense subscriber regions
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Over a three year period, the cumulative net benefit savings could be worth:
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More than US$3bn to a large US operator
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More than US$1 billion to a large European operator
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More than US$200 million to a large APAC-based operator
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Lead to EBITDA 5% larger than if SON features were not implemented
“The concept of SON and network automation has been discussed for some time with no clear sense of the commercial advantages it could deliver to mobile operators,” says Steve Bowker, CTO, AIRCOM International. “This study provides a clear justification for SON and emphatically underlines why operators should roll out SON functionality across existing UMTS infrastructure and then apply it through a measured LTE migration.”
The study contains clear recommendations on how mobile operators should implement SON features in their 3G and 4G networks to decrease OPEX and minimise CAPEX through data capacity enhancement projects. Surprisingly, the benefits that can be realised in a 3G environment are several times larger than those with LTE. So while adding data capacity to networks, operators should convert their 3G networks to SON operations and then add them to emerging LTE infrastructure – unifying SON functionality across UMTS and LTE.
“LTE network migration is an inevitable capacity generator for mobile operators around the world,” continues Bowker. “It remains however, a potentially complex and disruptive process that requires careful planning – both in terms of safeguarding customer experience and maximising existing network assets.
“Mobile operators must determine their own LTE migration strategies taking into account their own marketing needs, the spectrum available, congestion in the cell sites and the benefits that SON can apply to UMTS, HSPA, HSPA+ and LTE. Our white paper clearly shows that in most cases, more is to be gained by operators undertaking a controlled and measured approach to LTE, harnessing SON capabilities across these multiple technologies, in a timeframe that suits them.”
“Network planning systems will have a profound impact on network performance and profitability over the next five years,” says Mark Mortensen, Principal Analyst, Analysys Mason. “SON will be instrumental in removing manually driven processes, replacing them with fully automated systems that incorporate performance, planning, policy and real-time control. Our study clearly demonstrates that operators need not wait for LTE to realise these significant efficiency benefits.”
The full white paper, Hybrid SON ROI in realistic deployments of mixed 3G/4G networks can be downloaded here.
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Assumptions
The cost model within the white paper analyses the potential impact of adopting three coordinated SON algorithms in a hybrid architecture: automated cell planning (ACP), coverage and capacity, and energy saving. The analysis has used available operator financial end-of-year reports from 2009 and 2010 that quote revenue and EBITDA, by business faction per country in order to assess costs and cost savings. The analysis has taken into account the available data sets in the public domain that detail numbers of base stations per operator for existing GSM and LTE base sites and cells of various size classes. The analysis uses AIRCOM International’s consultancy and permanent staffing costs from its extensive outsourced engineering business. Lastly, the analysis uses site expansion and new deployment costs from previous Analysys Mason reports to assess LTE and UMTS costs.
SON savings presented in this whitepaper include a small component of revenue retention due to an increase in the quality of service provided by hybrid SON for the UMTS network. Additional potential CSP revenue from the higher data rates available from LTE are not included.
Also, the effects of micro-, pico- and femto-cells have not been included in these scenarios.
ABOUT AIRCOM
AIRCOM is an independent provider of network management tools and services. Our I-VIEW framework allows mobile network operators to rapidly, efficiently and seamlessly plan, manage, configure and optimise their networks. I-VIEW enables operators to regain visibility and control of their entire network, enabling radical shifts in business dynamics to become more efficient, more agile and more profitable.
The market leader in the provision and deployment of network engineering tools, AIRCOM products are in use across 135+ countries by over half the world’s mobile operators. Every day, the 20 top global operators depend upon AIRCOM’s tools and consultants to improve network coverage and quality for more than 1.1 billion subscribers worldwide. Established for 15 years, we have built our reputation on creating and releasing additional value from within cellular networks.
With offices in 14 countries, we provide local and regional viewpoints and resource, as well as ensuring that our operator customers benefit from our global knowledge. By looking ahead of the market and sharing intelligence, we develop the skills and tools that network operators need to remain competitive, whatever the economic climate.
With over four million hours working on 3G networks alone, our expertise translates into direct and measurable cost savings for mobile operators. From initial consultancy through project implementation, using our staff, training yours, or sourcing expertise for you to take in-house, we are dedicated to maximising the performance of your network, and therefore your business.
Contact for Press
Liv Nixon/Paul Nolan
CCgroup
T: +44 (0) 118 920 7650
E: aircom@ccgrouppr.com
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