Advertisement

Techno-Economics Behind Provisioning 4G LTE Mobile Services over Sub 1 GHz Frequency Bands

A Case Study for Indian Telecom Circles
  • Ashutosh JhaEmail author
  • Debashis Saha
Conference paper
Part of the Lecture Notes in Computer Science book series (LNCS, volume 10340)

Abstract

The fourth generation (4G) mobile cellular networks are being deployed rapidly across both the developed and the developing world. The choice of Long-Term Evolution (LTE) for 4G deployment is driven primarily by its technical superiority in catering to the rising consumer demand for high-speed mobile broadband services. The total cost of ownership (TCO) for deploying 4G LTE services, however, involve massive investments in spectrum acquisition and radio network infrastructure provisioning. Since spectrum bands in different frequencies have different wave propagation characteristics, their individual valuations also differ, leading to varying implications on an operator’s TCO and profitability. To clearly establish these financial and technical implications, this paper performs a comparative evaluation of 4G LTE deployment over sub 1 GHz, 1–2 GHz, and 2–3 GHz cohorts of frequency bands. With the help of a suitable techno-economic model, we forecast the number of 4G LTE subscribers, determine the achievable coverage and capacity, and analyze their comparative profitability through a discounted cash flow approach over a 20-year horizon across 22 telecom circles in India. Our results indicate that sub 1 GHz bands result in lower TCO and higher profitability for operators across all the 22 telecom circles when compared to other two cohorts. Interestingly, we also note that, among the four types of telecom circles, Category C circles, which are crucial to ensure the mandated last-mile coverage for rural Indian villages, come next to only Metro circles in terms of profitability, thereby increasing their attractiveness further in future spectrum auctions in India.

Keywords

Cellular mobile 4G LTE Spectrum Techno-economic assessment Total cost of ownership (TCO) Discounted cash flow (DCF) 

Notes

Acknowledgments

This paper is an extended version of our earlier work presented in the 9th International Conference on Communication Systems and Networks (COMSNETS), Bangalore, India, held during January 4–8, 2017. We sincerely thank the reviewers and the participants of COMSNETS 2017 for their insightful comments and suggestions toward improving the paper.

References

  1. 1.
    Qiang, C.Z.-W., Rossotto, C.M., Kimura, K.: Economic impacts of broadband. In: Information and Communications for Development: Extending Reach Increasing Impact, pp. 35–50. The World Bank, Washington, D.C. (2009)Google Scholar
  2. 2.
    Ovando, C., Pérez, J., Moral, A.: LTE techno-economic assessment: the case of rural areas in Spain. Telecomm. Policy. 39, 269–283 (2015)CrossRefGoogle Scholar
  3. 3.
    Jha, A., Saha, D.: Techno-economic assessment of the potential for LTE based 4G mobile services in rural India. In: 2015 IEEE International Conference on Advanced Networks and Telecommuncations Systems (ANTS), pp. 28–33. IEEE, Kolkata (2015)Google Scholar
  4. 4.
    Jha, A., Saha, D.: Offering fourth generation (4G) mobile services in India: a techno- economic assessment from the operators’ perspective. IIM Calcutta WPS No. 764 (2015). https://www.iimcal.ac.in/sites/all/files/pdfs/wps_764.pdf
  5. 5.
  6. 6.
    TRAI: On valuation and reserve price of spectrum in 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands (2016). http://www.trai.gov.in. Accessed 10 Sept 2016
  7. 7.
    TRAI: Recommendations on valuation and reserve price of spectrum in 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands (2016). Accessed 10 Sept 2016Google Scholar
  8. 8.
    Rao, A.M., Weber, A., Gollamudi, S., Soni, R.: LTE and HSPA+: revolutionary and evolutionary solutions for global mobile broadband. Bell Labs Tech. J. 13(4), 7–34 (2009)CrossRefGoogle Scholar
  9. 9.
    Bass, F.M.: A new product growth for model consumer durables. Man. Sci. 5, 216–278 (1969)zbMATHGoogle Scholar
  10. 10.
    Jha, A., Saha, D.: Why is 700 MHz band a good proposition for provisioning pan-India 4G LTE services? In: 9th International Conference on Communication Systems & Networks, pp. 1–8. IEEE, Bangalore (2017)Google Scholar
  11. 11.
    Mölleryd, B., Markendahl, J., Mäkitalo, Ö.: Impact assessment and business implications of options for allocation of spectrum in the 800 and 900 MHz band. In: 18th Biennial Conference of the International Telecommunications Society, pp. 1–23 (2010)Google Scholar
  12. 12.
    Nokia: Mobile broadband with HSPA and LTE – capacity and cost aspects (2014). http://resources.alcatel-lucent.com/asset/200183. Accessed 07 Aug 2016
  13. 13.
    GSMA: 4G connections hit one billion as mobile broadband momentum extends to the developing world (2016). http://www.gsma.com/newsroom/press-release/4g-connections-hit-one-billion-as-mobile-broadband-momentum-extends-to-the-developing-world/
  14. 14.
    Telecom, L.: Comparison of the performance of 700 MHz versus 2 GHz networks for PPDR services (2013)Google Scholar
  15. 15.
    Naseri, B.M., Elliott, G.: The diffusion of online shopping in Australia: comparing the bass, logistic and Gompertz growth models. J. Mark. Anal. 1, 49–60 (2013)CrossRefGoogle Scholar
  16. 16.
    Srinivasan, V., Mason, C.H.: Nonlinear least squares estimation of new product diffusion models. Mark. Sci. 5, 169–178 (1986)CrossRefGoogle Scholar
  17. 17.
    Division, U.N.P.: The World Bank - Annual Population Growth Data (2016)Google Scholar
  18. 18.
    Holma, H., Toskala, A.: LTE for UMTS: OFDMA and SC-FDMA based radio access (2009)Google Scholar
  19. 19.
    TRAI: The Indian telecom services performance indicators (2015). http://www.trai.gov.in. Accessed 10 Sept 2016
  20. 20.
    Indiastat: Indiastat database. http://www.indiastat.com/default.aspx
  21. 21.
    Ernst and Young: India’s cost of capital: a survey (2014). Accessed 21 Nov 2016Google Scholar

Copyright information

© Springer International Publishing AG 2017

Authors and Affiliations

  1. 1.Management Information Systems GroupIndian Institute of Management CalcuttaKolkataIndia

Personalised recommendations