Out to Win

Over the recent years, competition in the telecom industry has been intensified. Despite the richer and richer services provided, telecom operators have seen slow increase, or even decrease, of the Average Revenue Per User (ARPU). They are pay increasing attention on how to decrease the network's Total Cost of Ownership (TCO) through saving the Capital Expenditures (CAPEX) and Operation Expenditures (OPEX).

Analysis of WiMAX NetworkTCO

For an operator, the TCO includes CAPEX and OPEX. In constructing and operating a WiMAX network, CAPEX mainly consists of purchase and construction expenditures. Purchase expenditures cover the purchases of WiMAX and supplementary equipment as well as upgrade and expansion equipment in the later phase. Construction expenditures cover site acquisition, civil works, and equipment installation. OPEX is indirect costs related with routine network operation and maintenance. Operational expenditures cover the expenses on site rental, transmission rental and power consumption.

According to the process of network development, we can divide the lifecycle of wireless network into three stages, namely network construction and deployment stage, operation and maintenance stage and upgrade and evolution stage. The key factors that influence TCO are different in each stage of the network lifecycle. Through the analysis of the key factors that influence TCO in each stage of the network lifecycle, we can help the operators better manage the value generated by their investment and the total cost in each phase of the network lifecycle to continue maximizing such value by reducing and protecting their investment.

Network Construction and Deployment Stage— How to reduce the total cost of site.

In the network construction and deployment stage, the key factors that influence TCO is no other than the total cost of site.

It is noticeable that the cost of major wireless equipment makes up only 30% of CAPEX, because the costs of the site acquisition, civil works, and equipment installation are higher and even more than 50% of the total cost. Therefore, the cost of the supplementary equipment and the expenditures on site installation and deployment are more concerned about by the operators.

It is obvious that the most effective way to reduce the total cost of site is to reduce the number of sites, bring down the cost for the construction of the major equipment and minimize the expenditures on the installation and rental of the equipment incurred by their occupied space. Less number of sites means the corresponding supplementary equipment will also be saved. This can significantly decrease the operators’ CAPEX and OPEX.

As a pioneer of WiMAX Industry, ZTE has made every effort to reduce the total cost of site in the early stage of product design to help operators reduce the expenditure on equipment and operating maintenance,to meet operators’ needs to build the network site at lower cost.

Supported by a most complete series of base stations in the industry including distributed base station, low-cost integrated base station and low-cost indoor/ outdoor Pico base stations, ZTE is trying to reduce operators’ capital expenditure by providing the appropriate product portfolios according to the different scenarios. These products are supported with various flexible and efficient solutions for indoor and outdoor installation and deployment to meet the requirements of the operators.

ZTE’s base station equipment adopts the Software Defined Radio (SDR) technology, it enables the WiMAX and the 2G/3G equipment to share the same site, the same cabinet and the same transmission to save the site room and to reduce the construction cost and rental expenses.

The most effective way to reduce the number of the station is to increase the coverage of each station. By using MIMO, Beamforming, CDD and other industrially leading coverage enhancement technologies, ZTE can effectively enhance single station coverage by 20-40%.

Network Operation and Maintenance Stage — How to Reduce the Expenditures on Operating and Maintenance

During the network operation and maintenance stage, the energy consumption, transmission cost and equipment maintenance and management cost, which form the cost of operations and maintenance, are the three key factors that will reduce profit of the network operation.

It is all known, not to mention the evidence of startling data, that the operators have spent so much on energy that both they and the earth on which we are living are suffering the pain incurred by such a heavy burden. It is the duty of every one of us to save energy and reduce emission. Through energy saving and emission reduction, we can not only effectively reduce energy consumption and save operation cost but also make contributions to natural conservation by recovering the eco-system of the earth.

In the areas where there is limited resources of the traditional transmission like microwave and optical fiber, the operators have paid high transmission cost no matter they have built or rented them. If various transmission resources are suitably and flexibly used by the base station equipment, this problem can be easily solved.

In order to reduce the high cost of labor and equipment maintenance, the operators are eager to seek the highly reliable and maintainable and cost-effective base station equipment.

ZTE WiMAX products use board design featuring improved power amplifier efficiency, high integrity and low power consumption, as well as RRU natural cooling, BBU intelligent temperature control technology, intelligent power saving algorithm and other methods. All these help the customer to reduce energy consumption in an all-round way and create a truly green, energy saving and environmentally friendly network.

ZTE provides a variety of flexible and innovative solutions to meet the operators’ requirements, which can make full use of the indoor Ethernet and power line to realize transmission and transmit clock signal through IEEE1588 technology, and the unique WiMAX self-transmission solution can even provide the operators who are short of transmission resources with an approach to the reduction of the transmission rental.

In addition, Owing to the IP65 level of protection, extremely wide range of temperature, the back-up mechanism of the key board and modularization design, which enable high reliability and easy-maintenance of the equipment, can minimize the maintenance cost.

Network Upgrade and Evolution Stage— How to Reduce the Cost of Upgrade and Evolution.

During the network upgrade and evolution stage, the key factors that influence TCO are the cost of upgrade and evolution.

Because of the uncertainty of the network evolution and frequent change of standard evolution brought about by the diversity of wireless systems, the new technology and standard often enter the market when or before the network established by the operators based on the former technology begin to gain profit. The operators shall not be able to afford the high cost of the technology upgrade incurred by the failure to smoothly upgrade their established network to meet the new technology and standard.

How to best protect the investment and reduce the cost of upgrade and evolution? Operators have to select the products which can best satisfy the needs for radio network evolution, superimposition and convergence. Expand flexibly to support multi-frequency, multi-system, and multi-network overlay; Upgrade smoothly to best utilize the existing equipment and protect the existing investment to smoothly upgrade into LTE/16m in the future.

The unified SDR based platform innovated by ZTE is applicable to all kinds of wireless network.. It had been deployed massively in commercial network all over the world, won the awards granted by BBWF and GSMA.

The ZTE WiMAX product based on the unified SDR platform can support multi-frequency, multi-wireless systems including 2G, 3G, 16m and LTE and can support smooth evolution to LTE/16m. It has met the operators’ needs for network upgrade and evolution, extended the lifetime of the system equipment, evaded the investment risk and minimized the cost of network upgrade and evolution.

Under the circumstances of the global financial tsunami and facing the ever intensifying competition in telecommunication Industry, you can only win over the competitors by applicable low TCO strategy which take into account the key factors that influence TCO in the stages of network construction and deployment, operation and maintenance and upgrade and evolution to maximize the value with limited investment.

Supported by the extensive R&D experience in GSM, UMTS, CDMA and TD-SCDMA systems in wireless communication industry, ZTE has been focusing on the study of minimizing operaor’s TCO based on the analysis of TCO model and framework when designing and developing WiMAX products. It has embodied its low TCO concept in its product design, system network development and network evolution by taking into account the characteristics in each stage of wireless network lifecycle to save and protect the operators’ investment and keep on maximizing the value for the operators.