Network capacity and cost is being severely impacted by a combination of factors related to subscriber mobility and these impacts are only getting worse.

The factors that are driving increased signaling at present include:

(i) Increased signaling associated with 2G -> 3G technology migration and the increased number of handoff types (hard, soft, softer handoff)
(ii) Inter technology hand-offs between 2G and 3G (IRAT)
(iii) The increased number of handoff types associated with handoff between different network domains (E.g. 2G/2G, 2G/3G, 3G/3G)

The signaling occurring within a mobile network only supports the delivery of services and does not directly generate revenue for an Operator. Also the more signaling there is – the more messages must be processed by the CPU’s of the different network elements – inhibiting their ability to process revenue earning transactions. Hence it can be viewed as a ‘tax’ on the network that should be avoided at all costs.

With growing demand for bandwidth, rapid advances in broadband technology and the convergence of fixed and mobile networks/services the ‘tax’ impacts of mobility related signaling will only get worse, for example:

(i) As Operators begin to use second carriers the management of 2G/3G handoff becomes more intense and complex to manage, because it is happening at two different frequencies, with different in-building penetration.
(ii) Roaming between different technologies such as UMTS/Wi-Max and Fixed/ Mobile (IMS) creates new hand-off domains, leading to new hand-off types
(iii) An increase in hand-offs between different domains creates increased signaling intensity.

The inherent design of UMTS networks means that mobility related signaling has a major impact on network capacity across many network elements, including RNC’s, SGSN’s MSC’s and HLR’s – In many instances I have seen real-world capacity erosion on these system elements upwards of 50% – and with the advent of LTE, mobility management moves to the e-Node B’s giving rise to a similar problem at the base stations.

To help overcome this problem and ensure optimal performance, it is important for Operators to adopt a more sophisticated approach to Network Capacity Management that incorporates an assessment of subscriber mobility impacts on all the critical network elements.

The Cerion team has been working in this area for many years and is proud of the innovation we have delivered – in Artificial Intelligence (AI) based methods for characterizing and minimizing mobility impacts across key network elements –These solutions are being used by some of the worlds largest Operators to help improve network capacity, reduce costs and maximize End User Quality of Service.

With the escalating challenges in this space, we look forward to continuing on this path and leveraging our innovations to help Operators maximize their performance and shareholder returns.

As one of the founders of Cerion I have a vision of how our ideas can be leveraged and evolved to make life easier and better for Mobile Operators. Although our initial focus has been in the specialized area of network planning, I see a broader opportunity for our solutions to bring big benefits to the Finance, Marketing and Operational segments of our clients businesses.

Getting people to see what I see and buying into doing something about it though, is a completely different story. In growing our business, I meet with many people who are involved with all sorts of facets of the mobile industry. An industry which is after all one of the most technologically innovative and fastest moving industries out there – So it always comes as a surprise when people that I meet show little interest, are dismissive or even completely ‘switch off’, when I talk about what we are doing and how this can help Mobile Operators to improve their profits and network performance.

For those I meet with the opposite view – those that welcome new ideas and embrace change – albeit the ‘right change’ at ‘the right price’ there are fantastic rewards. Not only do these people get exposure and understand all the new stuff – which can be tremendous fun – but when the ideas they have championed deliver the benefits that were promised, the value created for the businees often brings them increased recognition which in turn helps to accelerate their careers.

So I would urge everybody to be receptive to innovative new companies ideas and listen to what they have to say. If the ideas they have are good ones – in terms of moving the business forward to overcome obstacles and make things better – It can only be beneficial to get involved, throw your ideas into the mix and help promote the overall solution within your business.

By doing this, you can help drive change where change is needed, influence the way the business evolves - which is very rewarding - and at the same time help it to deliver better performance. Helping to stave off the competition and making everybody involved more successful

Until next time - from MWC Barcelona

Peter

Over recent months, driven by the emergence of smart devices such as the iPhone, Blackberry Bold and Storm etc; combined with the promise of much better data speeds; myself and many of the people I know have been switching from 2/2.5G devices to their 3G  equivalents.

While data performance over 3G has undoubtedly improved, the quality and performance of voice services seems to have deteriorated in equal or greater proportion, making many people wonder if it was worth making the switch.

Since I getting myself a Blackberry Storm a few of months ago, I have experienced a much higher incidence of dropped calls and garbled connections, and the people that I know tell me that they have the same experiences with many other 3G devices that are out there.  As a consequence, many of them are so frustrated that they are debating whether to go out and buy a 2G phone as wel - to make sure that they  can talk to people when they want to!

Until recently I assumed that poor voice quality on 3G was driven by the 3G network having poorer coverage than the underlying 2G one, because it was not fully built out yet and that this spotty coverage was resulting in dropped calls - Not so.

Because then I  noticed that calls keep dropping even when I was sitting at my desk, with  great signal strength and data performance to match - So what’s going on and why is voice quality over state-of-the-art 3G tecnology so much poorer than using what is now considered ‘legacy’ 2G infrastructure? 

Digging deeper it is clear that unpredictable data demand on 3G can have a significant impact on voice - So when data usage is high, power gets dedicted to data, voice power and quality deteriorates and calls get dropped - In other words voice services, which are still the main reason for most people having a mobile device, are no longer guaranteed and effectively only function on a best effort basis as data demand changes!

Such performance is unacceptable and not sustainable for end-users and Operators must move quickly to overcome the problem. Otherwise,as data demand escalates, driven by the proliferation of new applications, voice quality is only going to get worse - With associated potential for increased customer disatisfaction, higher churn and lower revenues!

Fortunately for the Operators the team at Cerion has been looking at this challenge for quite a while and has developed methods for characterizing and reacting to variances in data demand as it emerges. Including sophisticated techniques for optimizing the design and configuration of the network based on real worl demand that balance the tradeoffs between  voice and data demand and which helps to reduce the impacts that dynamic data demand can have on end-user voice  quality.

Every day sees more news from Apple concerning the impact which the iPhone is having on the mobile industry. In fact just this morning I woke to a radio documentary about Zippo, who have recently launched an iPhone application. This  illustrates how the creation of new apps is spawning new uses for smart mobile devices, coupled with an increasing hunger for mobile bandwidth. Apparently it is no longer legal for fans to take lighters into concerts, so Zippo has developed an app that enables fans to shake their iPhone, produce a realistic striking noise on their device and then a flame on their screens that can be held-up in approval of the band!

I mention this to illustrate the fact that Apple has done a fantastic job in stimulating developers to come-up with new applications, which are a prime driver of mobile broadband growth. Their OSX platform not only offers developers the largest global market but also offers a 70% kick-back payment on revenues, which is a great stimulant to uncovering “killer apps”!

Numbers from Apple demonstrate the growing levels of application innovation and adoption by end-users – On July 11th 2008 they launched the App Store for iPhones with 500 apps, which by December had swelled to exceed 10,000 (many for free). During the same period, whilst still in it’s infancy, application downloads to iPhones averaged around 100 Million per month, serving to prove-out the consumer appetite and commercial opportunity of new applications.

With iTunes, Apple has created one of the most successful digital content delivery platforms in the world and more than 6 billion songs have been sold through iTunes to date. Coupled with this, Apple’s recent announcement that iTunes content will be DRM-free with variable pricing is bound to drive increased demand for digital content across all devices.

Of course it’s not just in the area of application development that Apple are driving the mobile industry forward – They have also blazing the trail in packaging smart devices  with applications. The iPhone itself is doing much to shake-up the device side of the industry – Arguably with touch screens having the biggest impact and triggering a fundamental shift in behavior towards using these in all aspects of everyday life.

Apple is clearly leading the mobile industry into the new broadband era and with the announcement this week of their Q1 2009 results they seem set to continue doing this. With record quarterly revenues of $10 billion and record profits of $1.6 billion, backed-up by $25 billion in cash and 35% gross margins – They are clearly the most important company to watch and the combination of the 3G iPhone and iPhone apps on iTunes can only serve to continue having a massive positive impact on the mobile industry as a whole.

A Happy New Year to all and may it be a successful and profitable one for all of us!

Talking of profits I would like to stress once again how imperative it is for Mobile Operators to adopt a Network Planning process that provides improved visibility of the correlation between Network Capacity, Total Cost of Ownership and Performance.

This week I spent time discussing this topic with several Mobile Operators in Europe and all were agreed on the need to do this from an End-to-End Network perspective, which addresses the impact that RAN Network design and configuration can have on Core Network capacity.

Without an integrated and automated process for doing this Mobile Operators run risks on all fronts – Of Network costs spiraling out of control, having inadequate capacity to serve their customers or degraded network performance, which can churn customers off the network and erode revenues.

The root cause of this problem is Mobile Broadband User Profiles, which are more dynamic and have a higher impact on the various packet switched network elements than in their circuit switched equivalents – In packet switched networks User Profiles can dramatically degrade RNC capacity with associated knock-on effects on both the capacity and Performance of Core.

This is not a new problem and used to happen in circuit switched networks where switch/MSC capacity was also affected by the traffic profile of the users connected to it – But in Mobile Broadband networks a combination of increased signaling intensity, 2G/3G network overlay complexity and IP application demand dynamics have heightened the problem significantly. So much so in fact that it is now imperative for Mobile Operators to understand what is happening in near real-time,  in terms of End-User Demand and Mobility – And tie this into rapid what-if network modeling that enables them to interpret and respond to the stark trade-offs between Network Capacity, Cost and Performance.

Having balanced these tradeoffs to achieve a very precise assessment of network costs Network Planning teams can then feed this information back to Marketing to maximize profitability (and revenues) – Helping to sustain shareholder confidence and  competitive advantage.

Access speed is a prime driver of Mobile Broadband adoption and as technology evolves to support faster and faster access, Operators can expect to see an increase in users coupled with an exponential demand for bandwidth.

As discussed before in these pages, the big question for network planners is who is going to use what application where and when – and how does this translate into an ongoing, efficient and high-performance network design?

To help create more efficient network designs, Operators need to improve the granularity and precision of their demand forecasts – by leveraging site-level network measurements back into the forecast, to create a more realistic view of what is happening in the real world and how this is expected to evolve over time.

When it comes to the detailed network design that is created from this input the rapid evolution of technology to support faster and faster access speeds, only introduces another layer of planning complexity. This is particularly applicable at the site-level, where HSDPA is stepping from (theoretical) throughput of 3.6Mb/sec to 7.2, 10.2 and later to14.4Mb/sec combined with 5.7Mb/sec HSUPA for example.

So when developing tools to do a better job of mobile broadband network planning the question arises – ‘How granular do I make my analysis and where to draw the line in terms of getting value out of deeper and deeper analysis?’

Also – ‘How do I address all of these network design and technology complexities and dynamics, without creating a tool that is too complicated for the people to use and/or that cannot be practically supported, once deployed in the field?’

Of course as theoretical bandwidth to end-user device increases it remains to be seen what impact signal-to-noise ratios will have on the actual throughput. Added to this there is a significant challenge on the device side, associated with minimizing power consumption and extending battery life – But no doubt all of these things will be overcome in time!

We have had some interesting discussions on the topic of simplifying engineering complexity this week and have identified some balanced trade-offs in our product that reduces the complexity of mobile broadband planning, while at the same time simplifying the process for the end user.

This is a great achievement, because in spite of increasing network complexity and dynamics, day-on-day we are helping to make the network planners life easier –Ultimately with the objective of delivering largely self-engineering mobile networks that will require very little intervention from the end-user.

I have been watching with interest the progression of RAN sharing agreements and wish Ericsson every success on the recent award of a four-year managed services contract for the operation and maintenance of the Hutchinson 3 and T-Mobile consolidated 3G Network in the UK.

In the near-term this will undoubtedly deliver significant cost savings for the parent companies, by reducing the number of base stations and lease costs for the associated sites. In the longer term however, I expect they will face some real challenges in terms of market differential and real commercial benefits.

Since the two companies are using the same RAN infrastructure it will be more difficult for them to compete on the coverage, quality of service and speed of their networks. When combined with a lower cost base, this has the potential to drive increased pricing competition between them. In the long run this could result in revenue erosion for both companies, with the potential to offset or even exceed the original cost benefits.

Another issue is that increasing demand for mobile broadband services, coupled with increased competition on price, could lead to capacity and quality of service conflicts between the parent companies. If one Operator has a new marketing initiative that creates a significant increase in demand on the shared RAN for instance, the capacity and/or quality of service for customers of the second Operator could suffer.

To offset this challenge the shared RAN engineering process needs to be extremely agile in terms of providing the ability to rapidly assess and respond to each Operators capacity and performance requirements, while safeguarding the other party and protecting the confidentially of each.

While some of these RAN capacity and performance issues may be relatively straightforward to manage, others are a lot more complex. The service usage and mobility profile of subscribers for example can have a significant impact on CPU occupancy and related RNC capacity. In several instances we have observed the erosion of RNC capacity by as much as 60%, based on the difference between the generic service profile used during the initial purchase of equipment and that experienced in the field.

In a shared RAN this means that variances in each Operators service profile have the potential to downgrade the overall RAN capacity as well as creating the potential for one Operators customers to directly impact the capacity that is available to the other!

To overcome these challenges it is even more critical for shared RAN Operators to overhaul their traditional planning processes than it is for ‘stand-alone’ Operators – Otherwise there is a significant risk of the challenges outweighing the benefits, particularly when it comes to maximizing the ability to compete.

As the adoption of mobile broadband gathers momentum, Mobile Operators must do everything they can to differentiate themselves based on tariff, the speed of their networks, quality of service and the coverage footprint that they offer their data users.

To maintain a market lead they need to optimize the balance between all of these factors while at the same time minimizing costs that help maximize the return for their shareholders.

So I expect to see a lot more infrastructure sharing as well as a lot more outsourcing of operations to the main vendors, who can bring significant efficiency improvements by consolidating the operations of multiple carriers into a single centralized service. I also expect to see companies like Huawei and ZTC continue to increase market share, principally because I do not believe that companies in the west have a sustainable solution for competing on price.

Regardless of whether operators opt for network or operational sharing or not and also regardless of the vendors they use in their network – There is still a need to create market differential based on the speed, availability and quality of the service they offer their customers, and all at minimum cost.

To maximize efficiency while addressing all of these things in the face of highly unpredictable mobile broadband demand, mobile operators must adopt a radical new approach to network planning that will enable them to step towards self-engineering networks.

As an initial step in this direction, they must abandon traditional “silo-based” approaches to planning and instead adopt an integrated, holistic and automated planning process that is able to cope with the dynamics and complexity associated with mobile broadband.

Traditionally, network planning for voice has been undertaken in “silos” by RF Engineering, BSC/Core Engineering and Transport Engineering – Mobile broadband dynamics, combined with network complexity and the need to deliver requisite bandwidth and quality of service to all users, mean this is no longer a viable solution however.

Silo-based planning for mobile broadband can be completely disastrous, because it is far too fragmented, introduces too many planning dependencies and is far too inefficient to fulfill the real time demands of customers – Resulting in insufficient capacity, poor quality of service and a loss of revenues – Not to mention skyrocketing costs.

While in truth it may be a long time before operators have the confidence to adopt truly self-engineering networks– It is a fact that unless they start heading in this direction they will face significant network challenges and related business risks.

It was interesting to read today that the Finnish Operator TeliaSonera is planning to backhaul all of it’s 2G and 3G traffic on its Finnish network over an All-IP infrastructure from RAD Data Communications.

TeliaSonera will be using the vendors ACE-3220 cell site gateways to connect to a fiber network and Cisco 7600 EDGE routers – They are one of the first Mobile Operators to upgrade to all-IP in order to support the growth of mobile broadband traffic driven by HSPA usage and planned evolution to LTE.

As I have discussed previously, with the shift to flat rate ‘all you can eat’ service packages, Mobile Operators revenues are failing to keeping pace with skyrocketing network costs and nowhere is this more critical than in backhaul – In many instances, Mobile Operators using traditional backhaul technologies are having to upgrade the transmission capacity to 6, 8, 10 or even 12 T1’s or E1’s. In situations where this capacity is leased, this can have a massive impact on cost and business profitability.

While some Mobile Operators are moving to adopt RAN sharing as a solution for helping to reduce site-leasing and backhaul costs, this brings it’s own problems – In my opinion TeliaSonera’s move is just ‘opening the floodgates’ in terms of the accelerated deployment of All-IP backhaul by many more Mobile Operators.

While backhaul costs are significant, to maximize profits for shareholders Mobile Operators need to look beyond the immediate problem and focus on reducing the total cost of network ownership. This requires a move away from traditional ‘silo-based’ planning methods towards a more holistic, end-to-end approach. By changing their processes, Mobile Operators can optimize the capacity and cost of the network from an end-to-end perspective, in response to changing market conditions and the demand for mobile broadband services – Thereby keeping network costs as lean as possible and at the same time delivering maximum value for their shareholders.

Earlier this week I read about Vodafone’s 35% drop in six-monthly profit and what Chief Executive Vittorio Colao plans to do about it – “We will improve operational performance through customer value enhancement and cost efficiency, supported by a Euro 1 billion ($1.56 billion) cost reduction program,” he said in a statement.  He then went on to say that “Vodafone’s previous strategic plan, formulated in 2006, has served the firm well – However, a number of challenges have evolved”. As a consequence Vodafone’s newly formulated strategy calls for the firm to focus on four key objectives – “Drive operational performance, pursue growth opportunities in total communications, execute in emerging markets and strengthen capital discipline.” 

With traditional sources of (voice) revenue under constant pressure and competition for customers driving the widespread adoption of flat-rate tariffs – Colao’s message echoes a fundamental shift that has taken place in the mobile industry.

With revenues no longer tied to the number of customers and usage you have, the days of growth at any cost are gone – Delivering value for shareholders is now all about cutting costs and improving efficiency.

There are many solutions to help the industry overcome these challenges and a key area where companies like Vodafone could benefit is by looking at the total cost of network ownership.  By focusing on initiatives to ensure they achieve the best possible return on their network investments, companies mobile operators could recover billions of dollars in stranded capacity from their networks – Helping them to reduce costs, improve revenue potential and maximize profits for shareholders – So why aren’t they doing this?

With announcements like those of Vittorio Colao, Vodafone is clearly heading down the right path – But to maximize shareholder return it is critical for these companies to be aggressive in terms of changing their traditional way doing things. 

This requires accelerated ‘outside the box’ thinking and the rapid adoption of new and innovative ways of doing things that will make them more efficient – The good news is there are plenty of solutions out there to help – The hard part is embracing change and moving quickly and effectively to adopt these new ideas before the competition beats you to it!