Moving Towards Smarter CAPEX in an Age of Austerity

Frank Rowsell, Metricell Group Consulting Director

February 24, 2017 Posted by Faisal Ahmed In Uncategorized No Comments

Improve both capacity, coverage and quality: is the challenge delivered to operators around the world. Keeping-up with the increasing appetite for bandwidth stemming from both consumers and device proliferation has never been harder. The heterogeneous network means expansion in-line with demand is no longer straightforward. The bottom line is, as always, the bottom line: demand is rocketing, but the revenues are rising only slowly.

In response to this challenge, operators are looking for ways in which they can maximise their existing spectrum and technology portfolio to achieve best-possible gains. In a recent blog post, AT&T Chief Strategy Officer and Group President, John Donovan, spoke of the operator’s success at finally removing 2G technology from their networks on January 1st 2017. “To help support the massive growth of mobile internet usage and free up spectrum for newer technologies, we discontinued service on our 2G wireless networks…Since 2007, data usage on our network has grown by 250,000% with video being a significant contributor to this growth.”

250,000% is a level of escalation that would have been hard to truly appreciate a decade ago but data provision has become a significant market differentiator with its successful provision crucial to both subscriber attraction and retention. “Customers are increasingly focussed on data. Media and video was less than 10% of traffic in 2010; now it is almost 50% in 2015.” With trends increasing this quickly over such a short amount of time, it’s little wonder that providers such as AT&T have been focussed on new activities which align with these trends. Sometimes, identifying strategic methods to save money can be just as effective as analysing more CapEx-friendly rollout options.

On the subject of tactical rollouts, Sprint announced last May that they would be lowering their CapEx guidance from $4.5bn to $3bn with the promise that a rollout of small cells would help to plug the gap. But how do you safely identify that a strategy such as small cells will be profitable for business and provide an enhanced experience for customers? The key lies in understanding how to harness the data already at your disposal against specific goals, such as improving capacity in highly targeted areas.

The modern operator has no end of data feeds flowing into the business – everything from site and maintenance data through to customer experience and planning – but this information often becomes departmentally-constrained within the departments that own it. We advocate an approach which looks to centralise and process all the data from across the business to rapidly model a range of potential scenarios. There’s more than one route to Smarter CapEx spend and one of the most crucial stages is figuring out which of your many potential strategies (HetNet, network merging, small cell rollout, etc.) has the potential of yielding the most reward.

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