OAKLAND, Calif., Aug. 7, 2006 (PRIMEZONE) -- The Signals Research Group, LLC (www.signalsresearch.com) today announced the availability of its report on the total cost of ownership (TCO) for 3G networks. Entitled "CA-CHING or KER-PLUNK: The Dollars and Sense of 3G," the 150-page report presents several case studies which compare the TCO for the migration from 2G to the two dominant 3G technologies: CDMA2000(r) and WCDMA (UMTS). The study concludes that both 3G technologies can help reduce an operator's TCO over a multi-year period.
As operators migrate to 3G, and as technology vendors develop their products, understanding the total costs of running CDMA2000 and UMTS networks are of vital importance. Because the impact on an operator's legacy network infrastructure is sometimes misunderstood, this report examines all aspects of the wireless ecosystem to evaluate the total cost of ownership. Also, as 2G network traffic increases due to a larger subscriber base and increased usage patterns, the economics switch in favor of 3G. Taking into consideration various important factors, such as voice capacity, data throughput capabilities, network traffic, handset subsidies, and in particular, the ability to reuse existing hardware, the relative cost difference between the two migration paths is as much a function of the participating vendors as it is the 3G technology itself. Still, given that the CDMA2000 migration places a large emphasis on hardware reuse, the CDMA2000 migration generally provides the lowest total cost of ownership over a multi-year period. At the same time, results suggest that the UMTS migration offers GSM operators a compelling option, in particular if they are able to quickly converge to a single radio access and/or core network.
According to the report's author, Michael Thelander, "3G is cost competitive with 2G today, and further economies of scale will continue to strengthen the 3G business case. Since operators, including those in developing countries, will eventually have to migrate their networks to 3G, the results of our economic modeling indicate that it makes more economic sense to deploy 3G today instead of deploying 2G and later upgrading to a 3G technology."
The report includes a number of case studies and sensitivity analyses, along with detailed assumptions that provide a comprehensive assessment of the capital (CapEx) and operating (OpEx) expenditures required to procure, install, maintain and operate a mobility network over a ten-year period. Additionally, the report provides readers with the engineering and pricing assumptions, as well as the quantity of radio access, core network and transmission network elements that are deployed for coverage and to increase network capacity.
Some of the key findings from the report include:
-- No single technology is inherently superior from a TCO perspective.
Instead, factors, such as the spectral efficiency, network
topography, choice of frequency, choice of vendor, site acquisition
costs, core network technology, voice and data traffic patterns,
and backward compatibility impact the economics and play a large
role in determining the most appropriate technology for a given
operator.
-- The deployment of "in-band" solutions, such as CDMA2000 at 850MHz
or UMTS at 900MHz, can reduce the operator's initial 3G CapEx for
coverage purposes by up to 70% when compared with deployments at
2100MHz.
-- The ability to reuse existing hardware and utilize a single radio
access and core network offers significant economic advantages that
cannot be underestimated since it impacts initial CapEx as well as
ongoing OpEx. Over a ten-year period, this advantage can equate to
a relative savings of 20% or more.
-- Declining 3G handset ASP trends and increased revenue opportunities
strengthen the 3G business case.
-- New site acquisition costs can easily exceed the cost of the
hardware deployed on the site. When GSM network capacity is
reached, not having to acquire more sites helps strengthen the UMTS
business case, including in developing markets. New site
acquisition is not a significant economic factor when migrating to
CDMA2000.
-- The incremental cost of deploying 1xEV-DO and HSxPA is justified
with only moderate data usage.
-- The increased network capacity offered by an All-IP network with
packet-switched VoIP services offers a substantial CapEx and OpEx
savings over ten years:
-- Core network CapEx is 70% lower than circuit-switch
implementations.
-- All-IP transport OpEx is 50% lower than traditional leased
lines.
-- TCO is up to 33% lower than a comparable circuit switched
network.
-- All-IP VoIP-enabled EV-DO Rev A networks will become available
in 2007, followed by HSPA VoIP-enabled networks in 2008 or 2009.
Additional information about the research report, including the table of contents, is available at www.signalsresearch.com.
About Signals Research Group, LLC
Signals Research Group, LLC is a US-based research consultancy that offers thought-leading field research and consulting services on the wireless telecommunications industry.
The consultancy's premier research product is its Signals Ahead research newsletter, which has a readership that spans five continents and the entire wireless ecosystem, including the world's largest mobile operators, the major OEMs, the top handset manufacturers, silicon IC suppliers, subsystem suppliers and financial institutions. SRG focuses on where the industry will be tomorrow and the technologies and service offerings that will shape its future and not those that defined its past. More information on Signals Research Group is available on www.signalsresearch.com.
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