Capital Planning

White Paper

Enhancing the budget allocation

process to sustain QoS targets

Actix White Paper Capital Planning

Quality of Service (QoS)

For wireless operators quality-of-service (QoS) is seen as the
primary engine behind subscriber growth. But to provide
and sustain a high quality network and meet established
QoS targets operators must carefully and diligently manage
resources. Arguably, meeting QoS targets imposed by both the
national spectrum agency and from within the operators own
organisation is directly dependant on the level of investment in
network infrastructure and the amount of spectrum available.
However, traffic carried on the network also directly impacts
QoS. Here the relationship is reversed since QoS degrades with
increasing amounts of traffic. These relationships clearly point
to a key engineering challenge for the wireless operator: How
to balance the investment in network infrastructure given the
available spectrum with the amount of traffic forecast, while at
the same time realising any obligatory QoS targets.

A wireless operator that fails to achieve its QoS targets will

naturally investigate ways to improve network performance.
The most cost efficient way of improving QoS is to optimise the
configuration of the network infrastructure as well as the spectrum
allocation in the network. This can be achieved by adopting
automatic cell planning techniques to optimise the configuration
of the network infrastructure, and using automatic frequency
planning techniques to optimise the allocation of spectrum.

Nevertheless, because QoS degrades as traffic increases, at a certain

traffic level, QoS targets become unattainable even when the
operator employs the best automatic optimisation techniques. If traffic
is forecast to grow to or beyond this level, clearly the wireless operator
must either consider investing in additional network infrastructure or
possibly acquiring more spectrum. But is it that simple?

Other issues the wireless operator might want to consider include:

How much can traffic grow until the quality degrades below
the QoS target?
What will the QoS be at the forecast traffic level?
What level of investment in network infrastructure is required to
meet QoS targets at the forecast traffic level?
W
 hat is the return on investment of the additional network
infrastructure to service the traffic at the required QoS level?
If the return on investment is not adequate, what is the necessary
increase in spectrum to meet the QoS targets?

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Actix White Paper Capital Planning

Capital Planning Process

Since operators have typically many regions in their network,
not all regions are faced with the same quality challenges
simultaneously. It is therefore important to allocate capital for
network investment by region to achieve an optimal
network-wide solution.

Marketing priorities
Available capital (budget)
Design process (ensuring consistency)
Network QoS objectives
Revenue impact (improvement x traffic)

Automatic optimisation software can be used to map how the

optimised quality degrades with increasing amounts of traffic. The
software can also recommend ways to minimise the necessary
investment in network infrastructure to meet QoS targets, and analyse
the return on investment. Furthermore, the analysis could derive the
minimum spectrum required to meet the quality targets.

Competitive matching (benchmarking)

Various sources of input data is needed to define the scope of

the capital planning process and to ensure all regions are scored
appropriately. Input data can include:

Once the relevant data has been assessed, capital planning can be
performed to find the optimal balance between regions and to make
certain the right investment is made in each region.

ROI and payback

Equipment constraints (use equipment in stock)
Scenario analysis (what if, traffic, services etc)

1. Optimize frequency
and cell plan
Target

1
2

2. How much more traffic

can the network support?

4
5

Today

QoS (S,N+)
QoS (S+,N)

3. More traffic is added

3
QoS (S,N)

)
)

4. How much investment

is needed to meet net
work quality?
5. How much more
spectrum is necessary to
meet network quality?

Today

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Actix White Paper Capital Planning

Budgeting for Network Expansion

The process of allocating budget for network expansion and
deployment is another challenging undertaking. Wireless
operators need to consider, for example:

Capacity and coverage planning

In many operator organizations there is a clear separation between
the coverage planning process and the capacity planning process.
Worse still, these processes are often performed by separate teams
within the organization. This means that not only is the budget for
these tasks completely detached, there is no scoring mechanism
between them. Ultimately this leads to conflicting decisions
coupled with ineffective use of budget.

Coverage site proposal process

Selecting candidate coverage sites is often subjective and relies
heavily on the knowledge of the engineer responsible for identifying
suitable sites. Good candidate can often be unjustly missed using
this method. Additionally, there is seldom any validation against
alternative technical solutions. And in most cases only coverage
is considered while disregarding the fact that an increase in
interference is often triggered by a new coverage site.
Scoring system
Choosing a new site is typically based on an assumed average cost
per site. This method doesnt account for operating expenditure
(OPEX) with respect to reconfiguration costs. The main focus is
often based on revenue rather than on return on investment (ROI).
This means that some low cost sites with high ROI are overlooked
while some high cost sites with low ROI are selected.

Capital planning objectives

The main objective of any planning activity is to increase the overall financial
.
result for the operators organization.
While capacity planning, QoS delivery and spectrum re-allocation make the biggest impact on revenues, there are other areas that
can release revenues too. For example:

Delivering a consistent approach across markets/regions; enforcing certain planning rules and validating the data used
Enabling prioritization: providing a consistent scoring mechanism allowing results to be sorted and ranked appropriately
Reducing time and effort: enabling the planning cycle to be performed quicker and more reliably
Enabling centralization: linking the centralized planning to regional and market databases
Enabling scenario analysis: exploring the budget implications of different network strategies

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Actix White Paper Capital Planning

Actix approach to Capital Planning

The recently developed Actix Radioplan capital planning
platform provides a framework for operators to maximize
their use of resources and budget to support a high QoS
network. For example, to optimize budget allocation, Actix
Radioplan performs a discovery activity whereby the design
review, corporate budgeting and capital planning process is
analyzed. Based on the outcome of this analysis a detailed
proposal is prepared outlining budget allocation for a
nationwide roll-out.

By using Actix Radioplans automatic cell planning tool, operators

are better able to standardize on best processes across all markets
including, for example, costs of network changes and traffic
growth estimates. This solution can also be used to maximize
revenue potential before site additions, identifying the right new
sites while ensuring both coverage and interference are not
excluded from the optimization process.

Existing Network

Tilt Only

Future Build

Tilt + Azimuth

Future Traffic

Radioplan
Capital Planning Platform

Antenna Change

Design Rules

TMA

Costs

New Sector

Validated Candidate
Sites

Figure 1. Capital planning process using the Actix Radioplan platform

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Actix White Paper Capital Planning

Immediate results using Actix Radioplan platform

Because capital planning differs from operator to operator, the Actix Radioplan capital planning solution can be fully customized to the exact
requirements of the operator. This approach maximizes network optimization. For example, in the case below, the overall network performance
was first optimized by reconfiguring existing sites in the network. This optimization led to great improvements in terms of coverage of the
network, as well as the ability to carry more traffic by adding more capacity.

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Figure 2. Coverage before and after optimized configuration

Next, a new study of sites and budgeting was performed to make sure all requested new sites would either meet a minimum quality improvement
criterion, or have a clear ROI. Doing this nationwide enabled the operator to measurably differentiate between the various regions in terms of how
many new sites could be included in the budget.

R
R ee g
g io
io n
n 1

Capex Site
C onsolidations

R e g io n 2

R
R ee g
g io
io n
n 3
3

C apex Site
C onsolidations
C apex site
C onsolidations

Figure 3. Report of approved new sites based on quality improvements and ROI

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Actix White Paper Capital Planning

An enterprise wide report was also generated offering the operator an overview of the allocation of CAPEX budget and the type of quality
improvements it could expect in each region.

Proposed Site
Co-Location

Quality Improvement
(Int. Erlangs)

Capital Expenditure
(Cumulative $)

Net Revenue Gain

($/Year)

ROI over 1 Year Period

(%)

Region 1

49.73

250,000

372,975

149

Region 2

48.56

500,000

364,200

146

Region 3

46.93

750,000

351,975

141

Region 4

42.60

1,000,000

319,500

128

Region 5

41.30

1,250,000

309,750

124

Region 6

41.07

1,500,000

308,025

123

Region 7

40.46

1,750,000

303,450

121

Region 8

40.06

2,000,000

300,450

120

Region 9

39.68

2,250,000

297,600

119

Region 10

35.96

2,500,000

269,700

108

Region 11

31,25

2,750,000

234,375

94

Region 12

31.21

3,000,000

234,075

94

Region 13

30.92

3,250,000

231,900

93

Region 14

30.73

3,500,000

230,475

92

Region 15

28.56

3,750,000

214,200

86

Region 16

26.77

4,000,000

200,775

80

Region 17

24.36

4,250,000

182,700

73

Region 18

23.34

4,500,000

175,050

70

Figure 4. Summary of regional CAPEX and quality improvements

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Actix White Paper Capital Planning

Actix capital planning approach of standardization and automation of business critical processes meant quantifiable benefits to this particular
operator in short, significant improvements in coverage and capacity, plus a significant reduction in the number of sites required leading to less
capital investment.

Automated wireless optimization software applications are key in this effort

as they provide not just the most cost effective means to optimize quality,
but also the ability to analyse resource requirements necessary to meet QoS
targets for any given level of traffic. The Actix Radioplan capital planning
platform is one such solution and, as demonstrated above, can help
operators achieve considerable capital investment savings.

250

200

150

100

50

AFTER

With growing levels of traffic year-on-year, network quality will

inevitably degrade. The only way to ensure imposed QoS targets are
sustained is for operators to be resource management driven and to
embrace dynamic network optimization.

BEFORE

Automated optimization for

sustained QoS

0
Figure 5. Sites required for meeting coverage target in a single market.
The capital investment was reduced by 36% in this case

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Actix White Paper Capital Planning

Information
Further information on Actix performance engineering solutions can
be found on the Web at www.actix.com

Company background
Actix is the international market-leader in wireless performance
engineering software. The companys vendor-independent solutions
analyze data from all major wireless vendors and technologies, from
2G to 3G. Over 5,000 engineers from more than 170 operators
globally including Verizon, Orange, Vodafone, SKT Korea, Hutchinson
3G and T-Mobile depend upon Actix software every day to improve
their wireless operations. Actix has offices in the United States, United
Kingdom, Singapore, Hong Kong, China and Japan.

www.actix.com

Americas
T +1 703 707 4777
F +1 703 707 4778
China
T +86 21 5396 0670
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Germany
T +49 351 40429 0
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India
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UK
T +44 (0)20 8735 6300
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