As wireless networks evolve to deliver the broadband Mobile Internet, Operators face significant uphill battles in terms of managing risk. Tremendous changes are taking place in the industry – With new auctions for spectrum occurring around the globe creating even more competition for customers, to compete in this arena companies will have to cut their costs to the bone. 

Now, instead of delivering plain old voice services Mobile Operators must deliver all kinds of new IP services of which they have no experience – The demand for mobile voice services is difficult enough to predict, but how on earth will they cope with dimensioning networks for the unknown uptake and usage of a plethora of IP services that have never been available to anyone before? Then there’s the network technology, which is evolving at breakneck speed to deliver faster and faster access – So that by the time you’ve planned and installed your equipment it’s already out of date! 

As demand for mobile data services takes off, Operators must run the gamut between massive wasted investments that impact profitability and investing too little which only leads to a bad customer experience and loss of revenue. The challenge for these companies from a network perspective is to understand exactly what to invest, where and when, which is an extremely complex task. The best and probably the only way of tacking it, is to conduct a highly specialized analysis of the network that is based on Wireless Operations Research (OR) techniques. 

By creating a sophisticated mathematical model of the network and then evaluating IP service demand based on real time-data extracted from it, Wireless OR can be used to pinpoint exactly where and when dimensioning &/or capacity problems will occur – Then by running optimization algorithms that evaluate all possible configurations of the network ahead of time, a new breed of wireless experts are able to diagnose and resolve potentially catastrophic problems, before they have ever happened. In this way, Mobile Operators can dramatically reduce the risk associated with potential under or over investment – Helping them make the best-possible investments as their networks evolve over time, achieving maximum revenue potential from these investments and at the same time delivering the best end-user experience possible! 

Peter

Somehow this posting that I wrote about two weeks ago dissapeared from my site so I am re-posting it for the sake of completeness! - More on capacity planning for wireless IP networks to follow soon!

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A very happy new year to all and may it be a productive and profitable one for all of us! – Reading through the industry press, 2008 is expected to be a year of significant change in Wireless – A year in which WiMAX takes off and many new end user devices are expected to drive far broader adoption of the (broadband) mobile Internet – And one in which convergence; the true “coming together” of telecoms, IT and the media; really starts to have a significant impact in everyday life.  From both a business and network perspective these developments mean a lot of new challenges – From an engineering perspective they mean accelerating up the learning curve, in terms of embracing and understanding new technologies. While from a business perspective it’s more about hitting on the right formula for differentiating yourself as a service provider, sustaining and growing revenue and being as efficient as possible from an operational and cost perspective. On both sides of the Atlantic there are auctions of new wireless spectrum that will help to stimulate new business – Here in the

US the 700 MHz auctions are just getting started and it will be interesting to see what if any new players come out of this. Particularly to see how Google and others targeting open/social wireless networking fare in terms of successful bids – With limited bandwidth allocations and reserve prices for a national license starting at $1.3B, the FCC has certainly set the bar pretty high in terms of the entrance level! Here at Cerion our team is busy developing new capabilities and algorithms to help tackle some of the complex and escalating challenges that we see ahead.  It promises to be an exciting year and probably one that looking back, people will say was a landmark in terms of Mobile Internet evolution – I look forward to engaging in these developments and to sharing my perspective as the year unfolds – Have a great one! 

Peter

Had a great chat this morning with Cerion’s Operations Research (OR) guru – Dr. Wei Yuan.

Wei helps Cerion to develop mathematical simulations for the most complex and challenging real world problems and then uses algorithms to make better decisions, helping our customers find the best possible solution to any given problem. 

Much of Wei’s time at Cerion has been spent developing the optimization engine that we have built into our mobile network engineering product to improve the performance of these networks and make them more efficient. Indeed, since joining the company, Wei has filed several patents in this area as well as that of making the ongoing configuration management of networks more efficient.

Considering the general increasing complexity of networks and the ever more competitive wireless marketplace – Wei and I share the view that Operations Research (OR) is something the industry needs to leverage more and more, to remain competitive and be successful. We have a tremendous number of ideas about where OR could be applied &/or used on a broader scale, to help reduce costs, boost revenues and generally make our customers internal processes far more efficient. 

Recently this has led us dig far deeper into artificial intelligence – An area where we are already using learning algorithms to help characterize the behavior of wireless networks and customers, to make better engineering, marketing and other decisions.  Interestingly many of the methods we are using in this area are based on ideas that go back as far as the seventeenth and eighteenth century, devised by mathematicians such as Thomas Bayes and Pierre-Simon Laplace. 

With the advent of ever-more powerful computing capabilities and advances in highly scalable fast-access databases, it is only relatively recently that it has been possible to apply these ideas to help with machine learning and the more general area of artificial intelligence. 

Focused on the transaction analysis that I have discussed in previously Cerion is applying artificial intelligence to help simulate, learn and charachterize the true capacity of the different  mobile network elements. By linking this with a forward trending capability and various optimal configuration algorithms we have already developed, we are enabling our customers to pro-actively understand exactly how much equipment they will need in their network, as well as where and when.

One of our visions when we founded Cerion was to devise solutions that would help networks become self provisioning - And now leveraging a combination of our own ideas and those of the master mathematicians of the past, it seems we are well on our way to making this a reality.

Peter

Google’s announcement last week regarding it’s Android platform and Open Handset Alliance will certainly help to accelerate the delivery of more open mobile devices and applications. Clearly however, this is only in the interests of Google owning as much as possible of the lucrative mobile applications/services  space, and they still have a lot of hoops to jump through before fulfilling the hype.

The obvious starting point for Google’s move into mobile is to develop its’ existing search engine, to deliver more powerful location-based search capabilities. To do this they need to know where users are at any given time and either work with Mobile Service Provider to get the information; or if you are Google; perhaps make sure that GPS is built into the end user device at the outset - Thereby bypassing the incumbents before leveraging the information into an application they already have, namely Google maps. 

With VOIP rapidly cannibalizing traditional voice revenues the obvious next step &/or replacement service is peer to peer video – And for Google, what better place to get started than by leveraging it’s ownership of Youtube.com and customizing this for mobile devices? 

Then of course there’s what really makes them their money - All that advertising revenue!  If they are successful with their foray into mobile, Google’s traditional revenues from plain old fixed searches, could be totally eclipsed by a combination of location-specific mobile searches, other location based services and web video advertising – All of which are the real icing on the cake and estimated to be worth $3.8 billion by 2011 – Up from just $135 million in 2007! 

With wireless access technology evolving rapidly and further de-regulation of the marketplace in the pipeline, alternative methods of access are proliferating and competition is getting fiercer and fiercer – In the face of this it’s easy to see that access method’s could become largely irrelevant to Google, because access usage will be driven to the lowest common denominator based on the uptake of the hottest new ‘open’ mobile device. 

So what does all of this mean for the traditional Mobile Service Providers?

Clearly they must keep a close watch on how Google’s progress and success is in bringing their open handsets to market but perhaps most importantly hedge their bets; by ensuring they have revenue sharing deals in place with Google and others like them as soon as possible! 

Peter

The traditional business models of Mobile Operators are changing fast and Hutchinson Whampoa seems to be leading the charge, with an announcement earlier this week that they are launching a Skype phone in all of their key markets, before Christmas. 

Historically these companies have benefited enormously from disruptive technologies but the introduction of Voice over IP services such as Skype leaves them in a real quandary.  On the one hand they have (and are) investing billions in evolving their networks to support mobile data, while on the other they are having to introduce flat-rate data plans to stave off the competition – When upwards of seventy five percent of their revenue still come from voice services, it’s easy to see why moving them onto a flat rate tariff using VOIP, will have a significant “disruptive” business impact.

Many of the Mobile Operators are either watching and waiting, or else resisting change by barring VOIP access on their networks. It seems inevitable that they will have to make the change sooner rather than later however and Hutchinson’s announcement this week only serves to reinforce this reality.

While Mobile VOIP is probably the most disruptive technology in the marketplace today Mobile WiMax runs a close second. Offering the potential for more “open” end-user devices and applications it can only serve to add fuel to the fire of mobile VOIP impacts – Creating even more competition while harnessing VOIP to accelerate the commoditization of voice services.

Both Mobile VOIP and WiMax make it increasingly difficult for Mobile Operators to develop long-term planning and as a consequence they must sharpen their tactical Sales and Marketing effort. The result of this is that Mobile Network Design and Planning becomes increasingly Marketing driven and far more real-time in nature. 

This makes it vitally important for Mobile Operators to strengthen the interface between their Marketing and Network Groups. One possible way of doing this is to leverage smart tools to streamline the process between them, so that Network Design is kept in lock-step with Marketing’s real-time needs.

Had a great session with some of our leadership team this morning, questioning how Mobile Operators are going to be able to plan their revenues without pinpointing the capacity of their networks to support new IP services.

Back in the Nineties Mobile Operators were busy throwing together networks with the sole purpose of capturing as many customers as possible. As a consequence their processes for planning capacity were fairly crude and in some cases non-existent – In fact running out of capacity was a great problem to have because it meant you were making lots of money and all you had to do to get over it was beat-up your suppliers to get you more equipment faster! 

Times have changed dramatically however and these same companies are now facing a spiraling decay in the price they can charge for traditional voice services, which were once the very foundation of their existence. Looking at the history of the Internet, as it evolved to provide faster and faster access it was used by more and more people to do more and more things and we can expect the same pattern with mobile networks as they evolve to support high speed data access.

The challenge for Operators now, is that in order to stay in business they have to replace the revenue that they once made from voice with new revenue from data services. When investing in new equipment to deliver these services, Operators don’t really know how much capacity it will have because they have little or no experience of working with the products or the new services running over them.   At the same time, they have less money to spend on equipment that is going out of date at a faster and faster rate – And to compound the problem, competition keeps getting fiercer and fiercer.

To be successful moving forward, these companies need the ability to sell new services at the right tariffs – To the right people, in the right places at the right time.  To do this it is critical that they understand exactly how much capacity they have; where and when; and sell into this. This is exactly what the Cerion team does for a living – So effective immediately we will be bolstering our marketing effort to ensure  this message is clearly communicated to our customers marketing and financial people, as well as to the network groups that we are already working with.

 Peter

Just had a great Saturday morning chat with some of the technology people here at Cerion, about how we help to boost revenues for mobile Operators by reducing dropped calls and improving customer churn – We were talking about the results of a recent study that did in one of the largest cities here in the US, where we measured a significant improvement in dropped calls that translated into millions of dollars in revenue benefit. Not only this but our front-end services and software didn’t (and don’t) really cost anything, because they pay for themselves several times over by permanently deferring network costs and cutting the design time from weeks to days or even hours. 

I am excited that what our company is doing can have a really positive impact on the industry. In fact only yesterday I was talking with our management team about how our localized insight into network capacity can help customers further increase revenues, through targeting marketing that sells into this capacity where it would otherwise go to waste. This is great because they get the incremental revenue without needing to buy any additional equipment. It also enables them to offer new services at highly competetive tariffs that differentiate them from their competitors.

Back at Cerion, our own marketing team are busy working on new content for our website, brochures and so on, based on the really tangible benefits that we were discussiong this morning. So I am looking forward to seeing our latest messaging and how we communicate these to our customers. Doesn’t seem to be rocket science though - After all I would have thought that any mobile operator in their right mind would be interested in making more money without having to spend any!

Cheers,

Peter

My business partner Neil Franklin just came in and told me that my blog is too boring and needs lightening-up! Coming from an engineering background, it seems I have become set in my ways and have forgotten how to write a straightforward article on a technical topic – So this is my first stab at a better and simpler style!

I have been watching with interest the developments in Europe related to 3G network resource sharing. Although O2 and T-Mobile announced their intention to share networks in the UK and Germany as long ago as 2001 these deals did not materialize. Then in February this year network resource sharing was back in the news, with Vodafone and Orange announcing their intention to share 3G radio access networks (RAN). This was followed by 3UK and T-Mobile announcing they are in preliminary discussions to do similar things, around mid-September. 

These announcements leave me wondering how they will plan the shared infrastructure in a way that delivers on the upside of lower costs, while protecting both parties’ interests in terms of mutual confidentiality, rapid service deployment, quality of service for end-users and so on. The more I think about it the more I believe any such venture will need tools like those developed by Cerion to make them successful.

Looking at what these ventures are setting out to achieve, it’s all pretty complicated with planning that is driven by two ‘customers’ forecasts, across 3 RAN and possibly 2 more switching domains – All using different vendors infrastructure and potentially even different radio spectrum!  Delivering a streamlined process for designing and planning shared resources, while minimizing time to market, is going to be a real nightmare – So I am very excited that the software tools developed by the team here at Cerion, can really help to overcome these problems.

I will be writing more on this topic in my new ‘plain english’ ramblings so maybe you won’t fall asleep next time you visit.

See you again soon!

Peter

As mobile networks evolve the capacity of many network elements is becoming increasingly dynamic, creating a big challenge for network financial planners and engineering teams alike. Until recently, it has been relatively straightforward to decide how much equipment a network requires and to develop the associated capital plan based on a few simple calculations – This involves dividing the capacity of each network element by forecast demand to determine the number of elements required and then multiplying by the cost per element to determine ongoing expenditure requirements. When the capacity of each element becomes dynamic however the process breaks down and much deeper analysis is required.

Capacity in mobile networks is increasingly driven by transaction processing (July 30^th article) that in turn is heavily influenced by subscriber mobility.  Subscriber mobility drives capacity erosion across many network elements as a result of service proliferation across multiple overlay technologies that in turn gives rise to a significant increase in signaling and hence CPU processing requirements. In modern GSM/UMTS networks the principal elements with (traffic) capacity limitations that are driven by transaction processing are RNC’s, SGSN’s and switches, including MSC’s/ Call Servers and Media Gateways.  The capacity of these elements can be extremely dynamic because of the signaling and associated processing they must provide to network in order for it to operate, including the support of: 

§      Multiple, concurrent service connections with multiple COS/QOS requirements

§      Multiple overlay technologies with multiple signaling protocols and message stacks (SS7/C7, IPV4 and IPV6)

§      Multiple network domains with multiple hand-off types 

To overcome the challenge of planning a network with dynamic building blocks, both engineering and financial planning groups, need the capability to model the impact of transactions in real-time for each system element.  Historically this methodology has been used to determine the capacity of MSC’s to support voice traffic, by developing a call profile that specifies the amount of time the MSC CPU spends on each service that it provides to each subscriber. This profile is multiplied by the CPU occupancy time for each service to determine the operating capacity of the switch in terms of the number of subscribers it will support.

By applying the same principals to RNC and SGSN equipment dimensioning, the team at Cerion has developed similar modeling capabilities for these system elements as well as conventional MSC’s/Call Servers/Media Gateways To ensure the best possible accuracy, the profiles used for these system elements go beyond voice and address the dynamics listed above – Including the modeling of capacity for combined voice and data services delivered over shared 2G and 3G infrastructure.

Experience of applying this approach in live networks, shows that he capacity of MSC’s, Call Servers, Media Gateways, SGSN’s and RNC’s can vary by as much as 60% depending on the profile – Based on this, it is absolutely critical for Mobile Operators to embrace the new approach to managing the capacity of their networks. Only by doing this will they be able to ensure that they are operating the leanest possible network with best possible performance. 

In today’s world, mobile network engineers face many challenges that must be overcome in order to streamline the precision and efficiency of engineering process. Many of these challenges are associated with unprecedented design dynamics that engineers must deal with on a day to day basis.

One of the principal dynamics is hyper-competition, which stimulates strong service, device and tariff differentiation by competing Mobile Operators. This increases the dynamics associated with service demand and affects churn, making it more difficult for engineers to accurately plan the capacity and configuration of the network.

Another significant dynamic is the rate of change of technology, which results in multiple overlays being added to the network, making it a lot more complex and difficult to engineer. One of the major issues associated with this is understanding the interplay between 2G and 3G technologies, which can significantly erode the capacity and performance of many core system elements. This underlying technology is also shifting from circuit switched to IP where demand is far less predictable, which only adds to the challenges facing network engineers. 

The rate of change of technology also means that network assets have a shorter and shorter lifecycle, meaning there is less time in which to get a return before improved technology comes along. Newer technologies will typically deliver more functionality &/or capacity at lower cost, so it is important for network engineers to keep network designs as lean as possible, while simultaneously delivering the best possible performance.

All of these factors contribute to the need for smarter network engineering tools, with the ability to address all of the above design dynamics simultaneously. To achieve this, the team at Cerion has developed a suite of tools with extremely powerful “what if” capabilities and the ability to concurrently optimize network design from both a capacity and performance perspective.

These tools provide network engineers with an automated capability to assess the viability and impacts of different design scenarios in real time. By wrapping flexible “what-if” analysis with optimization algorithms, the user is able to derive an optimal design for any given design scenario. In this way, despite the tremendous dynamics that network engineers must deal with, the time taken to arrive at a fully optimized solution is reduced from weeks to days.