Network operator processes -Investment aspects

"Layering" of investments

life cycle cost (LCC)

• Figure illustrates the LCC of two alternative systems, A and B. The cost price of A is lower, but the operation and maintenance costs of that system are higher than those of B. If the system contemplated is planned for longer service life than that indicated by T1 in the figure, it will be more economical to choose B although it commands a higher cost price

The LCC consists of the following components

Investment costs• direct costs of production, research and development, procurement,

transport, assembly, and testing.

Network management costs• training; • testing, upgrading, fault correction, allocation of network resources; • customer service; • storage; • transport in connection with network management; • technical descriptions of network management procedures; • power; and • rent for sites and buildings.

Phasing-out costs• dismantling; and • scrapping.

Cost of hardware handling

Cost optimisation

• the more expensive the product, the lower the costs

Network planning in a stable environment

• Important subprocesses:• data collection and supervision of the network to

determine its status; • forecasts: number of subscribers; traffic and

traffic interest per subscriber; • total traffic, shown in traffic matrices; • dimensioning; • expansion of the network's transmission and

switching capacity; and • disposition of the expanded network.

Network planning in a turbulent environment

• The market, with regard to a specific business concept. What will be the operator's future role - or niche - in a market exposed to severe competition, and how great a market share will he capture (possibly in cooperation with other operators)?

• Customer demands. Residential and business subscribers will demand multimedia, entertainment services, mobility and access to the Internet. New business opportunities will be opening up, but they will also make increased demands on networks: technical performance, time of delivery, and so forth.

• Technology. New technology - asynchronous transfer mode (ATM) and object-oriented software, for example - and further development of existing technology.

• Standard. New standards are issued continuously.

• Operations support . New means of providing computer-aided operations support (and network planning support, to some extent).

• Costs. Wide fluctuations of costs in different parts of networks; for example, drastically reduced transmission costs.

"The new conception of the world"

• The increasing complexity will also make investments difficult quantitatively. To safeguard himself, the operator may have to take specific measures; for example:

• Change the network architecture so that it will be more open, with generic platforms, if possible. (See Subsection 10.8.4.)

• Build the network with a certain prognosticated overcapacity (redundancy) in generic parts where the marginal costs are low

Master plan

Introduction

Summary of the present situation – demand for services and current grade of customer satisfaction• - relationships between tariffs, demand and growth (GDP)• - available capacity in the existing network• - available resources in the existing Administration / Network

operator organisation• - grade of functioning of the existing network• - grade of exploitation of available resources• - urgent actions

Summary of the proposed development plan - development of the demand for services and the foreseen grade of customer satisfaction

• - foreseen service penetration• - target network and application of new

technology• - fundamental technical plans• - network expansion plan• logistical requirements• - project execution and investment schedule

Financial analysis, retrospective and prospective - investment analysis

• - revenue analysis; potential, billing and reuse

• - operational expenditure analysis

• - determination of depreciations

• - calculation of the rate of return on network investments

Resources for planning, construction and operation - continued planning and project engineering

• - infrastructure for a modernised Administration• - implementation of a network management

system with the necessary human resources• - implementation of network operation units and

workstations• - administrative and technical training of staff• - preparation of tender specifications, tendering

procedures, conclusion of contracts; deliveries

Technology plan

Transfer modes in public networks

Bandwidth and coverage

Network development plan

Technology in the future telecommunications network

ATM increases network efficiency

Network applications

fundamental technical plans (FTP)

Numbering plan - shows how trunk codes and subscriber numbers are composed.

• Transmission plan - stipulates quality requirements and technique for the transmission of teletraffic.

• Routing plan - regulates routing between exchanges. • Signalling plan - defines the information that must be exchanged between

nodes when connections are set up. • Synchronisation plan - stipulates rules that must be followed to prevent

digital exchanges in the network from falling out of synchronisation. • Charging plan - specifies the principles of charging for traffic and services. • Network management plan - defines quality-of-service objectives and,

hence, requirements for grade of service, transmission performance and availability. Indirectly, quality-of-service objectives also apply to the organisation and performance of operation and maintenance work.

• Frequency plan - stipulates rules for network operators' use of available frequency bands.

International and national numbers

Number portability

Sources of delay

• coding (for example, GSM coding 90 ms); • ATM voice packetising (~7 ms); and • satellite communication (about 260 ms per hop). • Long transmission delays in interactive communication - telephony,

for example - mean that undesirable echoes in the transmission paths are perceived by subscribers. In general, delays of up to 25 ms are considered tolerable: the parties' own speech "drown" the echoes, provided the level is not too high. Echo cancellers - which entail extra costs, of course - are recommended, or stipulated, for circuits where longer delays occur.

• The 25 ms delay just mentioned is distributed as follows: 5 ms to PBXs or other private terminals at either end of a connection, and 15 ms to the public network. One conversion of telephony to ATM should be allowed within this range