SessionSession 6 Economic Impact of BAW Implementation · ITU Seminar Chisinau, Moldova, 4-6 October 2011 Session 6_IS - 1 SessionSession 6 Economic Impact of BAW Implementation Ignat

1

ITU Seminar Chisinau, Moldova, 4-6 October 2011 Session 6_IS - 1

SessionSession 66

Economic Impact of BWA Economic Impact of BWA ImplementationImplementation

Ignat StanevIgnat StanevITU Consultant, BulgariaITU Consultant, Bulgaria

ITU Cross Regional Seminar on Broadband ITU Cross Regional Seminar on Broadband

Access (Fixed, Wireless including Mobile) for Access (Fixed, Wireless including Mobile) for

CIS, ASP and EUR RegionsCIS, ASP and EUR Regions


Content of the presentation :Content of the presentation :

� Economic impact of BWA implementation

� Problem 1 – Economic Selection of BWATechnology:

� Example I – BA in urban area� Example II – BA in urban area� Example III – Segmented by technology BA

� Problem 2 – Economic impact of BWA in Rural areas:

� Bulgaria rural area – WBA network� Tajikistan rural area – WBA network� Georgia rural area – BWA network

� Moldova rural area -- BB access networkBB access network

2


Cost components of telecom network

Economic impact of telecom networkEconomic impact of telecom network

no. of exchanges

Optimum

Total

Exchanges

Subscribers

Circuits

Costs

NODES

CORE

ACCESS

nodes

CAPEX

�Acquisition

� Installation OPEX

� Maintenance

Overall economic results–Revenues, Cost, Cash-flow and Net Present Value

Fusibility studies –Profits and Expenses


BWA implementation BWA implementation –– rural areasrural areas

13.6

5.4

51.1

0

10

20

30

40

50

60

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010*

Pe

r 1

00

in

ha

bit

an

ts

Devel oped

Worl d

Devel opi ng

*Es ti ma tes

The devel oped/developi ng country cla ss i fi ca tions are ba sed on the UN M49, see:

http://www.i tu.int/ITU-D/i ct/defini ti ons/regi ons/i ndex.html

Source: ITU World Telecommuni cation /ICT Indi cators databa se

Mobile broadband subscriptions per 100 inhabitants, 2000-2010*

27%

71%75%

71%

LatinAmerica

Sub-Saharan

Africa

EastAsia &Pacific

SouthAsia

Source: The World Bank(1992)

Percentage of the population living in rural areas

24.6

8.0

4.4

0

5

10

15

20

25

30

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010*

Pe

r 1

00

in

ha

bit

an

ts

Devel oped

Worl d

Devel oping

Fixed broadband subscriptions per 100 inhabitants, 2000-2010*

*Es ti mates

The devel oped/devel opi ng country clas si fi cati ons are based on the UN M49, see:

http://www.itu.i nt/ITU-D/ict/defi niti ons /regions /index.html

Source: ITU Worl d Tel ecommuni cation /ICT Indi cators database

Rural areas telecom case :

� usually not interesting from business point of view

� telecom development should be supported by government

3


Problem 1 – Economic Selection of BWATechnology

Aim is to investigate the techno-economical impact of BWA compared to other broadband access technologies

Multiple techno-economical studies are carrier out for the purpose to determine the optimum access technology for the network

Selection is done by comparison of the economical parameters for each access technology


Planning guidelines for BWA technologyPlanning guidelines for BWA technology

Low subscriber base

*Wireless

Is area Greenfield

pocket within Brownfield?

OLT exists or planned?

FTTH

Is there high growth for

service demand?

Y

Y

Y

N

Extend network fromMSAN

Y

N

Y

N

N

Temp BB wireless / Plan

OLT

N

Is existing MSAN

capacity &BB reach?

* *

Source : STCBB Access Network Planning

Guidelines

Sample guidelinesSample guidelines

4


BWA Network PlanningBWA Network Planning

• BWA Planning

• Planning of alternative technologies

• Economic analysis

• Comparison of different technologies

BWA Planning Process

BWLA Planning Process


Example I – BA in urban area

Wireline

(FTTH)

Wireline vs. wireless greenfield

5


Example I – BA in urban areaWireless (WiMAX)


Example I – Economic resultsEconomic results

FTTH vs. WiMAX Greenfield

UC_1_9c UC_1_9bNet Present Value

-200000

-100000

0

100000

200000

300000

400000

500000

10/1/2008 10/1/2009 10/1/2010 10/1/2011 10/1/2012

US

D UC_1_9c

UC_1_9bWiMAXFTTH

6


Example II – BA in big city

Wireline

Solution

Wireline vs. wireless greenfield

MSAN


Example II – BA in big city

Wireless

solution

BS

7


Example II– Economic resultsEconomic results

xDSL vs. WiMAX Brownfield

WiMAXFTTH


Example III – Segmented by technology BA

� Pessimistic scenario (20%) Total Number of Subscribers

0

20000

40000

60000

80000

100000

120000

2009 2010 2011 2012 2013

Time

Nu

mb

er o

f S

ub

scri

ber

s

Total Number ofSubscribers

� Optimistic scenario (35%) Number of Subscribers per Customer Class

050000

100000150000

200000

250000

2009 2010 2011 2012 2013

Time

Nu

mbe

r o

f Sub

scri

ber

s

BB_Bus

BB_Res

year xDSL WiMAX FTTB LAN+CATV

2009 67.4% 0.1% 17.4% 15.1%

2009 50916 76 13144 11407

2013 70% 2% 23% 5%

2013 177167 5062 58212 12655

Difference 126251 4986 45064 1248

year xDSL WiMAX FTTB LAN+CATV

2009 67.4% 0.1% 17.4% 15.1%

2009 50916 76 13144 11407

2013 70% 2% 23% 5%

2013 101238 2893 33264 7231

Difference 50322 2817 20119 -4176

Estimated market segment

Estimated market segment

8


Example III – Segmented by technology BA

WiMAX

xDSLFTTB


Example III – Economic resultsEconomic results

Results for NPV : xDSL+ WiMAX + FTTB

Chisinau - NPV

0

20000000

40000000

60000000

80000000

100000000

120000000

9/1/2009 9/1/2010 9/1/2011 9/1/2012 9/1/2013

Pessimistic Optimistic

9


Problem II – Economic impact of BWAin Rural areas

Broadband improves standard of live in rural areas with the large number of services offered to the inhabitants

Economic analysis based on planning of rural broadband access completed with feasibility studies could facilitate taking of administrative decisions and implementing of regulatory policies even if economically the broadband implementation is not justified


Broadband in rural areas Broadband in rural areas -- Bulgaria Bulgaria

Number of villages in Bulgaria without Internet service provider, with 1, 2, more than 2 ISP:

3997

708

228 116

0

500

1000

1500

2000

2500

3000

3500

4000

4500

1

С ела в които няма нито

един доставчик

С ела в които има 1

доставчик

С ела в които има 2

доставчика

С ела в които има повече

от 2 доставчика

no Internet

1 ISP

2 ISP

> 2 ISP

Usually in the capital and in the big cities broadband penetration is higher than in the rural areas,

especially in remote, mountainous and border regions

Distribution of the population

10


Bulgaria rural area – WBA network

Scenario 1 ( 6 BS) Scenario 2 ( 4 BS)


Bulgaria rural area – Feasibility studies

Higher costs of BB services

Pay back period after 5 years

Urban area

Net Present Value (IRR=6,5%)

-800000

-700000

-600000

-500000

-400000

-300000

-200000

-100000

0

2011 2012 2013 2014 2015

in B

GL

NPV

Net Present Value (IRR=163%)

-600000

-400000

-200000

0

200000

400000

600000

800000

1000000

1200000

1400000

2011 2012 2013 2014 2015

in B

GL

NPV

11


Tajikistan rural area – WBA network

Results for wireless ( 3 BS - WiMAX )


Tajikistan rural area – Feasibility studies

Feasibility study for the Capital

Pay back period 3-4 years

Urban area

12


Georgia rural area – BWA network

WiMAX


Georgia rural area – Feasibility studyNet Present Value

Tbilisi-Tskneti-Dighomi-Tabaxmela-xDSL_corr1; IRR=31.3%; Tbilisi-Tskneti-Dighomi-Tabaxmela-WiMAX; IRR=81.5%

-600000

-500000

-400000

-300000

-200000

-100000

0

100000

200000

300000

400000

1 2 3 4 5

in E

uro Tbilisi-Tskneti-Dighomi-Tabaxmela-xDSL_corr1

Tbilisi-Tskneti-Dighomi-Tabaxmela-WiMAX

Pay back period 4-5 years

2 year market Net Present Value

Rural area -Tskneti-WiMAX-b-Year2; IRR=86.4%; Rural area -Tskneti-xDSL-Year2; IRR=0%

-100000

-80000

-60000

-40000

-20000

0

20000

1 2

in E

uro

Rural area -Tskneti-WiMAX-b-Year2

Rural area -Tskneti-xDSL-Year2

13


Moldova rural area -- BB access networkBB access network

Target access speed:� 2 Mbit/s

WiMAX

xDSL

Segmented by technology network


Moldova Moldova rural area –– Feasibility studies

xDSL + WiMAX

Rural area - NPV

-60000

-40000

-20000

0

20000

40000

60000

80000

100000

9/1/2009 9/1/2010 9/1/2011 9/1/2012 9/1/2013

xDSL&WiMAX

Nisporeni-Rural

-60000

-40000

-20000

0

20000

40000

60000

9/1/2009 9/1/2010 9/1/2011 9/1/2012 9/1/2013

xDSL WiMAX

xDSL & WiMAX

NPV - Nisporeni

0

200000

400000

600000

800000

1000000

1200000

9/1/2009 9/1/2010 9/1/2011 9/1/2012 9/1/2013

WxDSL&WiMAX

Feasibility study for typical town

Documents

SessionSession 6 Economic Impact of BAW Implementation · ITU Seminar Chisinau, Moldova, 4-6 October 2011 Session 6_IS - 1 SessionSession 6 Economic Impact of BAW Implementation Ignat