Conditions of 3G Planning

Planning should meet current standards

and demands and also comply with future
requirements.
Uncertainty of future traffic growth and
service needs.
High bit rate services require knowledge of
coverage and capacity enhancements
methods.
Real constraints
Coexistence and co-operation of 2G and 3G for
old operators.
Environmental constraints for new operators.

Network planning depends not only on the

coverage but also on load.

Objectives of the Planning

Traffic Forecasting:
To measure the demand on targeted marked so as to allow
an appropriate growth of the Network.

Coverage:
To obtain the ability of the network ensure the availability
of the service in the entire service area.

Capacity:
To support the subscriber traffic with sufficiently low
blocking and delay.

Quality:
Linking the capacity and the coverage and still provide the
required QoS.

Costs:
To enable an economical network implementation when
the service is established and a controlled network
expansion during the life cycle of the network.
3

Business Planning
Marketing is responsible the revenue side and must also produce a traffic
forecast.
The engineering model must translate the traffic forecast into a network
plan and generate the capex and opex numbers to be passed to the
financial model.
The financial model takes in information from marketing, including key
metrics, revenue forecast, acquisition costs and capex, opex from the
engineering model.
MARKETING MODEL
ENGINEERING MODEL
FINANCE MODEL
4

Financial model
Capturing all the detail of the customer base dynamics, the financial model
allows the most comprehensive and rigorous approach to forecasting the cost
base and ultimately a valuation.
The financial model outputs are those used by decision makers at board level
and the financial community.
The presentation pack produced by the financial model provides a complete
business case, which takes the reader from an analysis of the population
through to a range of valuations.
The valuation of the business case is the ultimate objective of the suite of
models.

The model combines inputs from the marketing and the

engineering models with operating cost assumptions to forecast
the financial statements and free cash flow.
Engineering
Engineering
Models
Models Network
Network
Opex
Opex and
and Capex
Capex
Forecasts
Forecasts

Market
Market Forecast
Forecast
Model
Model
Customers and
Forecasts

Network Capex and Opex Forecast

Revenue

Business
Business Planning
Planning
Model
Model

Profit
Profit
&
& Loss
Loss

Balanc
Balanc
e
e
Sheet
Sheet

Operational
Operational
Structure,
Structure,
Distribution
Distribution
Channels,
Channels, Staffing
Staffing
etc.
etc.

Operating Cost Assumptions

Cash
Cash
Flow
Flow
All figures in Nominal Local Currency

Free
Free Cash
Cash Flow
Flow in
in Nominal
Nominal Local
Local
Currency
Currency
(Operating Cash
Flow less Capital
Expenditure)

Marketing Model
What
What kind
kind of
of
Services
Services do
do we
we
offer?
offer?
How
How many
many
customers
customers do
do we
we
have?
have?
How
How much
much are
are
they
willing
they willing to
to
spend?
spend?

Revenue
Revenue Forecast
Forecast

Traffic
Traffic Forecast
Forecast

What
What are
are our
our
tariffs?
tariffs?

Essentially the question is how many customers are there

and what does the mobile operator has to deliver for the
money paid by those customers.
7

Cost and Revenue Structure

End
End User
User Revenue
Revenue

3G
3G
Operators
Operators
Radio
Radio
Network
Network
Cost
Cost

End
End
User
User

3G
3G
Operators
Operators
Core
Core
Network
Network
Cost
Cost

Internet
Internet
Connectivit
Connectivit
y
y Cost
Cost
3G
3G
Operators
Operators
Hosting
Hosting
Platform
Platform
Revenue
Revenue

Third
Third Party
Party Revenue
Revenue
8

Traffic Forecasting
Penetration & total subscribers
Customers, gross adds, churn
Voice, data and other source of revenues
User growth yoy up to maturity of the network.
As initial works to measure the required capacity

Demographic Anatomy of
Targeted Market (i-th year!)
Total Population
100%

70% Old Enough

to Own
Mobile Phone

60% With Sufficient

Income

Addressable Market
42%
80% Expresses
Interest: Potential
Demand 33.6% of
Population

10

Penetration Growth
60%

Penetration of Population

The potential demand assumptions

should be linked to changing
demographic patterns and changes
in income.

50%

Potential Demand
Ceiling

40%

30%

20%

10%

1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013

The potential demand sets a

penetration ceiling, conceptually
the maximum potential penetration
is the level at which the service life
cycle curve reaches its upper limit.

0%

11

0%

2013

2012

2011

2010

2009

2008

2007

2006

2005

100

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

Number of Subsc. (Million)

Growth of Subscribers
120

Saturation Level

80

60

40

20

12

Traffic Growth
240

Saturation
Level

Offered Traffic (kErl)

200

160

120

80

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

0%

1996

1995

40

e.g voice traffic/user = 27 mErl which comprises 80% of total

traffic, Data traffic/user = 10 mErl which is the rest of total
traffic. Combined average generated traffic per user is 23.1
mErl.
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The Traffic data from the marketing model drives

network dimensioning.
Because the model is intended to be used in the business-planning phase, it is
essential that a range of scenarios can be evaluated rapidly.
The impact of varying, for example, different tariffs can be calculated instantly.
The engineering model can run completely in the background so that business
planners can run scenarios without recourse to engineering.

14

The Engineering Model covers capex and

opex for 2G and 3G networks.
The capex and opex part of the 3G Mobile Toolkit covers the technical aspects,
including capital and operational expenditures.
The scope of the 3G engineering model includes dimensioning and costing for
the following elements:
Radio network
Core network & interconnect
Server network

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