TEA

Family of Business Case Analysis of Tools

www.4gbusinesscase.com
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Contents
Overview Market analysis

Technical analysis
Economic & financial analysis Sensitivity analysis

Comprehensive report
Default parameters

Overview

TEA|WiMAX and TEA|LTE

Empowering 4G players with an effective business case analysis tools to set a solid foundation for a successful initiative Unique and integrated applications Built over six years of extensive industry experience with strategic assignments and projects for major operators and equipment suppliers

Key characteristics (1/2)

Analyzing the business case for a WiMAX and LTE initiative with a holistic approach, in an integrated and iterative way, taking into account all critical aspects

Supporting a fast and simplified configuration of more than 500 input parms with a number of them pre-set to typical/recommended values in the technical part
Enabling the user to view results instantly in an animated graphical format through a dashboard-styled and very easy-to-use GUI

Key characteristics (2/2)

Compliant with: IEEE 802.16e/d/m standards and the WiMAX Forum Fixed/Mobile Profiles
(TEA|WiMAX)

The latest version (Release 10) of the LTE standard (TEA|LTE)

Allowing the definition of custom profiles and bands Allowing the manual setting of the number of Users, BS/eNB, Logical Sectors, Radio Links, MME, S-GW, P-GW to take into account the outcome of external/additional calculations/dimensioning

Four main integrated analyses

Market analysis
Estimating the potential market and revenues for 4G services

Technical analysis
Dimensioning the network infrastructure to derive the required bill of quantities

Economic and financial analysis

Calculating all key economic & financial projections and indicators

Scenario and sensitivity analysis

Analyzing the influence of parameter and boundary condition changes
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High-level work flow

Market data Market analysis

Market and revenues forecast

Economic & financial data

Technical data

Economic and financial analysis Technical analysis Bill of quantities

Economic & financial projections and indicators

Scenario and sensitivity analysis

Inputs

Module

Outputs

Market analysis

Introduction
Estimating the potential market and revenues for 4G services:
Extension of the geographical areas (up to 5) to be served and their specific scenario distribution
Market segments (up to 6) to be addressed

Service profiles (up to 6) to be offered

Market segment penetration per year Impact of churn

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Work flow
Territory & demography Territorial analysis Target percentages Penetration and churn rates

Market forecast

Other revenues

Service profiles characterization

Service profile Service profiles distribution

Market forecast

Revenues

Revenues forecast

Inputs

Module

Outputs

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Territorial analysis
Each geographical area of interest is characterized considering key territorial parameters:
Total extension of each geographical area Percentage of dense urban, urban, suburban and rural scenarios Target percentage to be covered

As for main demographic data, they are:

Number of inhabitants, households and micro/small/medium/large located in each geographical area

Percentage of distribution of each market segment among the different scenarios

Target percentage to be served

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Service profile
The portfolio of service profiles to be offered is defined considering:
Technical features
Internet access: PIR and CIR in down and up link VoIP: number of VoIP lines per users, coding algorithm

Pricing policies
Monthly service fee, one-time activation fee, monthly lease fee

Distribution of services profiles per each market segment

Distribution of user equipments related to the selected service profile per each market segment

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Market forecast
The market size per each year, each area and each market segment is evaluated by taking into account:
Penetration rate Churn rate

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Revenues
The revenues for the 4G services to be offered are estimated depending on:
Service profile characterization Market forecast

In addition, it is possible to take into account other revenues, i.e. other possible total annual incomes related to the network operation such as:
Revenues due from for example sale of end user devices Revenues due from end user accessories Revenues due from other business units Etc.

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Technical analysis

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Introduction
Dimensioning the network infrastructure to derive the required bill of quantities:

Technology characterization

Type of BS/eNB (up to 3) and UT/UE (up to 6)

Path loss model for the link budget analysis Down and up link capacity demand per year Existing backbone infrastructures Wireless backhaul technology distribution

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Work flow
Frequency Market forecast Service profile characterization and distribution Target area

Channel bandwidth

Technology Capacity demand

Cell overlapping factor

MCS & SNIR Performance Network dimensioning

EPC characterization

BTS/eNodeB configuration Equipment User equipment configuration Margins Path loss model

Backhaul characterization

Roll-out

Roll-out function

Bill of quantities
Inputs Module Outputs

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Technology
The 4G technology is characterized according to the standard certification profiles defined by either WiMAX Forum (WiMAX) or 3GPP (LTE). In detail the following parameters are specified:
Frequency Channel bandwidth Duplexing format

Modulation and coding scheme

SNIR

Custom profiles can be defined to completely customize the use of the 4G technology in terms of:
Frequency Channel bandwidth Duplexing format
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Equipment
In order to perform the link budget analysis, equipments (BTS/eNodeB and user equipments) are characterized in terms of :
Antenna gain Cable losses Feeder losses Transmit power Noise figure LNA gain Penetration loss

Body loss
Number of sectors Number of antenna elements in transmission and reception
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Performance
The maximum path loss on the basis of a relevant number of parameters:
Equipment characterization (BTS/eNodeB and user equipment) Margins
Cell edge coverage probability, lognormal shadowing standard deviation, fast fading margin, interference margin (in down and up link)

The coverage predictions of the median path loss related to each scenario are calculated on the basis of the selected path loss model (Cost-231, SUI, ECC-33, Lognormal with/without shadowing, Free Space) The capacity provided by each BTS/eNodeB is evaluated on the basis of:
Supported MCS Distribution of MCS Number of carrier per sector Number of sectors per BTS/eNodeB
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Capacity demand
To evaluate the feasibility of the services to be offered and to perform the dimensioning of the network infrastructure correctly, the capacity demand is estimated

The capacity demand denotes the capacity required in down and up link by the users located in each area to be served and it is estimated depending on relevant parameters:
Market forecast Service profiles Overbooking factor Peak busy hour activity factor

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Network dimensioning
The network dimensioning aims at estimating:
Number of BTS/eNodeB on the basis of coverage and capacity requirements Number of radio links per each technology (SDH, PDH, IP Ethernet, etc.) Number of ASN-GW (WiMAX) or MME, S-GW, P-GW (LTE)

This network dimensioning is performed by taking into account:

Coverage requirements Cell overlapping factor Characterization of ASN-GW/EPC Percentage of BTS/eNodeB with wireless backhaul and multihop factor Distribution of radio links among the various technologies (SDH, PDH, IP Ethernet, etc.)

Legacy network (existing BTS/eNodeB and radio links)

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Roll-out
The network roll-out is evaluated on the basis of the roll-out function, that denotes the percentage of year-on-year deployed infrastructure.

The annual bill of quantities is estimated in terms of:

BTS/eNodeB

Logical sectors
Radio links ASN-GW / MME, S-GW, P-GW

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Economic and financial analysis

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Introduction
Calculating all key economic & financial projections and indicators to assess the feasibility of the initiative:
CAPEX & OPEX Depreciations Interest rate on borrowings, tax rate, discount rate Financing Equity Perpetual growth

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Work flow
Bill of quantities Head count Salaries & benefits Market and revenues forecast Market forecast Personnel SG&A items COS items COS TCO SG&A

Bill of quantities Revenues forecast

D&A Market forecast CAPEX

Statements

Years to depreciate CAPEX items

Inputs Module Outputs

Economic & financial projections and indicators

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Personnel
The personnel costs are analyzed considering all the typical roles in a telecommunication operator:
Executive staff Technical ops Sales Other (marketing, general & administrative people)

and defining:
Their salary Their benefits

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CAPEX
To forecast capital expenditures, all main CAPEX figures for the 4G initiatives are defined and calculated, such as network and system equipments costs:
BTS/eNodeB User equipment Backhauling (wireless and wired) Core network Spectrum license Other possible CAPEX

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D&A
On the basis of CAPEX, the depreciation and amortization breakdown is evaluated

In particular, for each CAPEX item years to depreciate and amortize are defined

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COS
To forecast the cost of services, all main COS figures for the 4G initiatives are defined and calculated, such as:
BTS/eNodeB User equipment Backhauling (wireless and wired) Core network Spectrum license VoIP Technical staff

Other possible COS

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SG&A
To forecast costs of SG&A, all main SG&A figures for the 4G initiatives are defined and calculated, such as:
General & Administrative Marketing Sales Customer acquisition Customer care Billing Bad debts and churn

Other possible SG&A

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Statements
To understand whether the 4G initiatives make or not a positive net income during the analysis period
The following statements are produced: Profit & Loss, Cash Flow, Balance Sheet The following indicators are estimated: IRR, NPV, PBP, Enterprise value

The statements are carried out on the basis of:

Revenues CAPEX & OPEX Depreciations Interest rate on borrowings, tax rate, discount rate Financing & Equity Perpetual growth

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Scenario and sensitivity analysis

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Introduction
Analyzing the influence of parameter and boundary condition changes, to identify the most critical factors for the success of the initiative Allowing a fast and iterative fine-tuning of the business case, in real-time and total privacy Presenting the results in an animated graphical format instantly from the different Market, Technical, Economic & Financial perspectives

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Critical factors
Market analysis
Users target percentage, pricing policies, distribution rates, penetration rates

Technical analysis
Frequency, channel bandwidth, duplexing, BTS/eNodeB choice, MIMO, cell overlapping percentage of BTS/eNodeB with wireless backhaul, roll-out rate

Economic and financial analysis

Site acquisition, logical sector cost, user equipment cost, wireless backhaul equipment cost, spectrum license Site lease and utilities, wired backhaul, customer acquisition

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Comprehensive report

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Comprehensive report
Automatically compiled and published in editable and PDF formats Containing a complete summary (with tables, diagrams and charts) of:
All inputs and assumptions
All results of the market analysis All outcome of the technical modelling All economic and financial statements for up to ten years

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Default parameters

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Default parameters
To help configuring the technical part, a number of relevant parameters are, by default, pre-set to typical/recommended values:
Technology characterization BTS/eNodeB characterization User equipment characterization Multiple antenna system gain Margins EPC characterization

These values can be changed at any time during the analysis

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Thank you for your attention!

For more information, please visit our web site, call us or send us an e-mail.

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