part 2.2 methology planning

8/13/2019 Part 2.2 Methology Planning

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POST AND TELECOMMUNICATION INSTITUTE

OF TECHNOLOGY

PART 4

METHODOLOGY OF PLANNING

MODELS


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ACTIVITIES OF NATIONAL PLANNING

METHODOLOGY OF PLANNING MODELS


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Activities of national planning includes two types of omestic

overall planning for socioeconomic development and omestic

overall planning for land utili!ation"

omestic overall planning for socioeconomic development includes three

types# those so" i$ %eneral planning for industry/&usiness development and

after that is detail region/area planning for industry/&usiness development' ii$

Region overall planning for socioeconomic development and after that is area

overall planning for socioeconomic development' iii$ Region general

construction planning and after that is area general construction planning

omestic overall planning for land utili!ation and after that is region general

planning for land utili!ation and after that is area general planning for land

utili!ation


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GENERAL/DETAIL INDUSTRY/BUSINESS

DEVELOPMENT PLANNING



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Industry/&usiness development planning have &een re)uired toconforma&ility and complying for socioeconomic development

planning and land utili!ation planning

There are many types of industry/&usiness development planning*Among them have four types of relation together as telecommunicationand information planning# power planning# road and railway planning#water supply and drainage planning

%eneral planning for telecommunication and information developmentafter that is regional planning for telecommunication and informationdevelopment and after that is detailed area planning fortelecommunication and information development




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There are two approaches for telecommunication and

information planning as" %eneral telecommunication and

information development planning and %eneral &usiness

telecommunication and information networ- planning

%eneral telecommunication and information development planning is

general programming defined target# principle# oriented for development

telecommunication mar-et and telecommunication infrastructures#

technologies# services and performed solutions

TELECOMMUNICATION AND

INFORMATION PLANNING APPROACHES


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%eneral &usiness telecommunication and information networ- planning

is evolvement with the proper evolution of the networ-# the services# the

technologies# the mar-et and the regulatory environment* These

evolutions imply a wider set of options to implement a networ- than in

the past and as a conse)uence# the importance of careful planning and

analysis for alternatives have larger impact on the networ- capa&ilities

today in order to assure the needed capacities# the associated )uality of

service and the re)uired investments




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%eneral telecommunication and information development planning are

including"

Regional information infrastructure planning and after that is detailed area

informatics infrastructure planning

Regional telecommunication infrastructure planning and after that is detailed

area telecoms infrastructure planning

Those are organi!ation telecommunication and information infrastructure

according to national overall development programnning# industry of

telecommunication and information development programming# ensurednational defence and security




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%eneral &usiness telecommunication and information networ- planning

are including"

Regional/detailed area information networ- planning

Regional/detailed area telecommunication networ- planning

After that &oth types of planning have performed strategic

networ-/&usiness planning# long term structural planning and

sort/medium term planning

After all other# if necessary may &e performed local specific planning todetailed steps of planning a&ove




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BUSINESS TELECOMMUNICATION

NETWORK PLANNING



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or general feasi&ility to economically ustify the move

towards the evolving architectures one should pay attention

to planning of investments and services in a manner which

ma-es sure there is no costly overinvestment nor &adutili!ation of already earlier made investments# and at the same

time ensures fluent migration of the services for the large

amount of eisting su&scri&ers


NETWORK PLANNING


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5nder the previous evolutionary contet# the planner is confronted

to a num&er of re)uirements in order to provide answers to the

following needs"

6usiness 7riented 8eeds"9hat are the &est customer segments to address in multimedia :

9hich new services have to &e introduced through time :

9hat is the &est service &undling per customer type :

;ow to increase mar-et share : ;ow to maimi!e revenues :

;ow to reduce capital ependiture :

;ow to reduce operational ependiture :

REQUIREMENTS TO THE PLANNERS


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8etwor- 7riented 8eeds"

;ow to forecast multimedia services and related traffic demands :

;ow many nodes to install# especially for 8%8 :

9hat is &est location for new systems and related communication media :9hat is the &est networ- architecture and routing in 8%8 :

6est &alance &etween &uilt and lease for infrastructure :

;ow to plan capacity evolution and solutions migration towards 8%8 and

towards 3% :

;ow to converge service applications and platforms through different access

technologies :

;ow to ensure


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7peration


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The most typical tas-s that the planner has to perform to solve the compleity

associated to the previous re)uirements are summari!ed as follows"

Initial situation analysis for economy# customers# services and networ-

Pro&lem partitioning

ata gathering

efinition of alternatives per scenario

>apping solutions per scenario

esign# dimensioning# location and costing

7ptimi!ation


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ue to the high speed of changes &oth on the environment and

the technologies# the traditional planning activities that were

performed in an separated way# today have to &e strongly

interrelated among themselves and to the other networ- relatedtas-s* or that environment# the


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ata on topologies# architectures# location# routing# etc from

long term planning are transferred to the medium term and

iteratively to short term activities

Planning results are transferred to 8> applications and viceversa# 8> measurements and status are provided as inputs to

the planning activities

7perating


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NETWORK PLANNING


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8etwor- planning addresses all the activities related to the

definition of the networ- evolution in order to allow the

transport of an epected amount of traffic demands# ta-ing into

account a set of re)uirements and constraints* epending on

the timescale of the networ- evolution pro&lem under study#three different planning activities can &e performed"

Long-term plnn!ng ?=TP$# whose o&ectives are to define and

dimension the networ- parts which are characteri!ed &y a long lifetime

and large investments for their deployment


NETWORK PLANNING


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Me"!#m-term plnn!ng ?>TP$# whose framewor- should emphasi!e the

&ehavior and the relationships among the sets of entities ?nodes# lin-s#

su&networ-s$ and the list of planning actions and procedures which are

involved when planning a networ- to guarantee the convergence towards

the esta&lished long term plans* Therefore# >TP should have as an

o&ective the capacity upgrading of the networ- nodes and lin-s' always#

following the =T deployment strategies of the optical networ-

S$ort Term Plnn!ng ?


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ue to the high num&er of scenarios possi&le in the

competition# a special analysis of those scenarios is needed in

order to derive which ones are feasi&le &oth from a technical

and economical point of view* The following structuredprocedure is recommended to perform those analyses in an

iterative manner"

Telecom networ- scenarios are generated with the premises derived from

realistic mar-et share and competitive situation

inal o&ective is to have a )uantified design fulfilling the strategy for

the operator the re)uirements of the society and &eing feasi&le from the

&usiness point of view

INTERACTI%E PLANNING &OR

COMPETITION SCENARIOS


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efined processes and tas-s are needed for all solutions and

technologies* Internal data and algorithms vary for each technology case

eed&ac- among activities is needed to incorporate results of the

optimi!ation on the inputs and assumptions

6usiness assessment is made at the start of the process to select feasi&le

solutions and discard the ones not &eing realistic* A more detailed

&usiness plan is o&tained at the end of the analysis for the selected

solutions and providing the &usiness and investment plans




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The o&ective of the longterm planning ?=TP$ is to define and

dimension the networ- aspects which are characteri!ed &y a

long life time and large investments for their deployment'

therefore mainly the topological and technological decisions

and fi&er ca&les capacity issues are addressed* =TP# then#ela&orates a target networ- o&ective for the mediumterm

planning process' drawing to normally singleperiod processes

Two different phases/approaches in =TP are generally

considered

LONG-TERM PLANNING 'LTP(


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The )trteg!* plnn!ng# which aims at defining the technology and

architecture to &e used in the networ- through the comparison of

different options* It is generally &ased on a greenfield approach and uses

parametric models and typical values for the relevant networ- parameters

n"mentl plnn!ng# which uses as input the technology and networ-architecture selected &y the strategic planning and defines the structure of

the networ-2* The pro&lems to &e faced in the fundamental planning

usually are the allocation of functions in the networ- nodes# the topology

planning# the apportionment of functions &etween the optical and the

client layer# the definition of an optimal networ- structure



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The o&ective of ?>TP$ is the capacity upgrading of the

networ- nodes and lin-s following the longterm deployment

strategies of the optical networ-* Then# the goal of the >TP is

to determine the routing map and node capacities

>TP is normally performed in a multiperiod &asis' setting of the

different steps for moving from the installed plan ?if any$ to the long

term networ- o&ective ?calculated &y the =TP$

6eing more concrete# >TP should generate the following results for each

planning period"

etailed routing and grooming for each demand ?traffic relation$* It should not

have conflicts with the defined =TP criteria

ME+IUM-TERM PLANNING 'MTP(


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The >TP time scale should &e e)ual to the one for =TP and is su&divided

into several shorter periods ?typically around one year each$* In a first

step# the =TP process is performed for getting the =TP target networ-

?igure 2*,a$

This first step uses the demand forecasts and the installed plant* In asecond step# the >TP process calculates the different steps for reaching

the =TP target networ- ?2*,&$



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This second process uses as inputs the >TP multiperiod demand

forecasts# the installed plant and the =TP plan ?generated in the first

step$* 6oth steps should &e repeated each time the demand forecasts

change dramatically' in any case# it is very normal to repeat them in each

planning period ?T0# T1# B$# typically each year* In case of strong

variations of the demand forecasts# the =TP target may change in eachplanning period* In this situation# the >TP plan ?steps$ calculated each

year goes towards different targets' something li-e performing steps

towards a CmovingD target

5nder conditions of high uncertainty a 87 could adopt a different >TP

approach ?igure 2*,c$# having its mediumterm plans ?>TPs$ partially

disoint from its longterm plans ?=TPs$



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In this case the results of the =TPs are considered li-e a set of valua&leconstraints# rather than an a&solute target to &e reached* The mostimportant reasons driving this option seem to &e"

The 7perator considers as useless to plan periods far away in the time since there

is the highest pro&a&ility to have unrelia&le forecasting leading to unrelia&le

results

The optimi!ed results attaina&le in a static =TP are due to the huge advantage to

&e a&le to use networ- resources in a long period of time selecting the &est fitting

with the incremental traffic* 5nfortunately traffic demands are su&ect to time

constraints ?not allowed to delay the provisioning of a circuit in order to optimi!e

the networ- filling$ and the networ- resources deployment is su&ect to &udgetconstraints* onse)uently through the months and the periods the networ- grows

unoptimised compared to the =TP perspective and it will &e impossi&le to stic-

to the =TP programs even if >TP planning algorithm is the &est possi&le one

ME+IUM-TERM PLANNING 'MTP


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PLANNING METHOD



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@perience of nationals in ma-es general was planning to

apply scheme processes of other fields as environmental

planning# management planning of resources# usedland

planning# etc*

There are normally three main su&ective groups ta-e part to construction

planning with differential roles and lia&ilities those are"

1$ Eurisdictional office'

2$ Planning organi!ation'

3$ ommunity

PLANNING METHOD


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Eurisdictional office gets responsi&ility to ta-e the initiative

planning process after decided higher authorities* Eurisdictional

office has got responsi&ility approve constructive plans and

ma-e sure the human and financial resources to performed

plans

=i-e this urisdictional office is a special administrative

organi!ation of national or region or area

,URIS+ICTIONAL O&&ICE


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Planning organi!ation must &e included specialists to having a

thorough -nowledge of planning wor-s and telecommunication

eperts and other related eperts as authority of infrastructure

programing# authority of constructive programing# authority of

architectural programing# etc*

PLANNING ORGANIATION


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ommunity is special su&ect represented to citi!ens# which have interest for proects

Role of community su&ect to set up a plan may &e different from referenced advice to

implemented programing

7n eperience of international countries# division responsi&ilities &etween su&ects of

planning organi!ation to su&ect of community may &e represented as Ta&le 2*2

The selection is measure in oint of community depend on some factors as the content of

programing and government policy and resources and of course ta-e interest in oneself

community

=evel oin of community as grow as directly responsi&ility planning organi!ation as

decrease as correlatively

If this matter have &een determined from the &eginning of planning process more

advantageous

COMMUNITY


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PLANNING METHOD

orm and ta-ing part

methodRole of community su&ect

Fnowledged for show 8otice planning

7n the increased to

measure oin

G

@changed information Investigation and gatherinformation

As-ed advice >eeting community

>atter define together


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Planning process have &een divided five steps as"

i$ Programing preparedness'

ii$ Proposed programing'

iii$ Planning creation'

iv$ Approved planning'

v$ Performance and supervision

igure 2*13 show main results/products for general and detail

planning If this matter have &een determined from the

&eginning of planning process more advantageous

PLANNING PROCESS


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PLANNING PROCESS


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Step 1 Programing preparedness

Programing preparedness focus on determine main matters concerned to planning to

fundamentals for planning as" 5r&an planning# usedland planning# infrastructure

planning# architecture planning# construction planning# socioeconomic planning# etc*

7n organi!ation# carry out special programing and &eginning to get in touch with

community su&ect

In a word# programing preparedness re)uired performance of wor-s as"

etermined to main matters concerned to planning

etermined/selected for planning organi!ation

Research on informational demand

ontact to community su&ect

Research informational demand has &een carried out as follows"

PLANNING PROCESS


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PLANNING PROCESS


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Step 2 Proposed programing

Proposed programing included some actions' among them most important

was construction eecutive plans

In the step 2# the contents and range planning as well as role and

participation of su&ects must &e defined and concreti!ed

Eurisdictional office need to assert finance and necessary products of

planning

Planning organi!ation must &e completed collection and relative import

information to geographical information system# &asic document unit

6asic document unit included reports and enclosed map need to dispense to

mem&ers of planning organi!ation and to &e fundamental to discussion at

meetings

PLANNING PROCESS


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This much# actions as follows need to finish in step 2"

@sta&lished eecutive plan

efinition the contents of planning and range of each contents

inished &asic document unit

Affirmation and assigned lia&ility of participative su&ects

7piniona&le recording of su&ects for defined contents of planning

In possi&le condition# &egin supplementary initial information according to

planning

PLANNING PROCESS


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Step 3 Planning creation

Planning creation was most important to &ring out planning# often

include three types of actions as follow"

Action 1" ompletion information ?document# map # data# etc*$* This action needs

to perform main wor-s as" Review and evaluation for new informational demand'

ollection new information' To &e incorporated %I


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Step 4 Approed planning

Approved planning was ordinary carried out rules availa&le# as follow"

Eurisdictional office organi!ed a meeting for introduce to planning with relevant

office and planning organi!ation and specialists

Eurisdictional office re)uired relevant organi!ations valuation and comment for

planning

Eurisdictional office has approved planning or if not approved then there was

re)uired ministry of specialty in writing and approved process has repeated as

a&ove

PLANNING PROCESS


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Step ! Performance and superision planning

This is last step of planning process

Approved planning will &e transferred relevant offices to eecution

In order to ensure planning has &een deployed on reality and learn fromeperience for net planning

Eurisdictional office has decided to carry out supervise eecution planning

There are two forms supervise eecution planning those are" 1$ Permanent

supervise' 2$ Periodic supervise

orm permanent supervise has carried out valuation ensure rate of process

eecute planning# called supervise process

PLANNING PROCESS


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orm periodic supervise ?may &e three or five years a time$ has carried out

valuation result of planning and its impact to initial target# called effective

supervise

@ach of forms supervise has re)uirement and organi!ation and eecutive

method individually* 6ut all of them were important and supplementary

each other and ensure planning served life

In &rief# step ( CPerformance and supervision planningD includes actions"

Reali!ed contents of planning has &een approved

>a-e plan supervised eecutive planning

arry out supervise process and/or

arry out supervise for effect


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ACCESS NETWORK PLANNING



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The deployment of access networ-s with a reasona&le costre)uires planning and implementation of the design in a wellorgani!ed manner* %enerally there are two &asic approaches tothe networ- planning

The classical approach# which is currently used for the planning ofnarrow&and networ-s# is &ased on the forecast of demands and thedimensioning of the networ- in order to minimi!e the re)uired networ-resources ?ca&ling# e)uipment$

This approach is oriented towards the minimi!ation of the investments

re)uired to provide a given amount of resources and is very suita&le forsituations where the traffic and num&er of su&scri&ers increases smoothly

ACCESS NETWORK PLANNINGMETHO+OLOGY


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The new transport technologies# li-e 9> have made the optimi!ationof resources less critical the operators have o&tained a technology#which provides the a&ility to rapid and su&stantial increase of thenetwor- capacity at the moderate cost level

7n the other hand the growing popularity of the Internet has led to the

fast and su&stantial traffic increase in short time frame and pro&lems withrelia&le forecasting of demands

In this situation# the uncertainty in the demand forecast and the relativelylow cost of the &andwidth have limited the applications of the traditional

planning it produces a networ- that is optimi!ed for a given demand

matri# &ut it does not guarantee that the networ- is ready for upgrade incase the demands were underestimated or growing


METHO+OLOGY


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The second design approach is to &uild a networ- that can provide a

considera&le ecess of resources ?transport# switching or routing$ thus

providing nearly seamless networ- upgrade at the price of higher initial

cost

The presented networ- design approaches can &e com&ined together inorder to find the solution that &etter fits the operators needs and strategy

8etwor- planning should address aspects related to the networ-

evolution* Traditionally the planning activities can &e divided into TP$ and =ong TermPlanning ?=TP$


METHO+OLOGY


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The coherency is in practice hard to o&tain and operators of the access

networ-s are often applying a more pragmatic and simpler approach for

the networ- design

A planning process of access networ-s is strongly dependent on the

networ- technology# networ- architecture# offered functionality andresource allocation strategies

As more technological solutions are availa&le on the mar-et# the operator

has more options for the design of a suita&le and costeffective access

networ-

5nfortunately it ma-es the access networ- design process more

complicated


METHO+OLOGY


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It is possi&le to formulate mathematically most of the networ-optimi!ation pro&lems

The mathematical formulation of the pro&lem has to use appropriatenetwor- models# necessary simplifications and general assumptions

In practice there is hard to find the optimal solution for the networ-# &utthe o&tained solutions can &e close to the optimum

The applica&ility of a particular solving techni)ue is in close relationwith the si!e of the pro&lem# which depends on the type and num&er ofinput varia&les and constraints# and on the type of the used cost/energy

function# which is minimi!ed during the optimi!ation process

MATHEMATICAL &OUN+ATIONS O& ACCESS

NETWORK PLANNING


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A A CA O A O S O ACC SS


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MATHEMATICAL &OUN+ATIONS O& ACCESS

NETWORK PLANNING

Models Op!"!#$!o% Al&o'!("s>ulti commodity flow model @numeration @numerationPathflow mode l 6ranch and &oundPath formulation model Relaation techni)ues

>arginal improvement techni)ues


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The access networ- design process is a process that has to cope with many initial assumptionsand also with many constraints


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8etwor- planning tools are offered &y the access networ- solution vendors#planning tools vendors and academic institutions


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The TITA8 proect started in 12 and ended in 1+* The developed

within this proect TITA8 networ- optimi!ation tool is dedicated for

technoeconomic analysis# and a demand forecast for access networ-

The tool is &ased on generali!ed access networ- models and utili!es the

geometrical model for the calculation of ca&le lengths and the cost of civil

wor-s

It covers ?non ehaustive list$ the following aspects"

The evaluation of access networ- evolution scenarios &ased on eisting networ-s

and fi&re/radio/copper access technologies

The comparison of scenarios and strategies for introducing the fi&re in the loop

?IT=$ for residential customers

The calculation of the lifecycle cost and the overall system &udget

ACCESS NETWORK PLANNING TOOLS


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The TITA8 tool is &ased on the @celK spreadsheet

It has two operating modes the main mode and the data&ase mode

The data&ase mode is used for the estimation of the cost of components and

services# while the main mode is used for the definition of the networ-

architecture# services and performing all calculations The TITA8 data&ase contains several sections"

ost components# containing all component specific information

=earning curve classes# which define a specific learning curve &ehaviour

Holume classes# which define a specific mar-et volume evolution

7AL> classes# which define a certain operations# administration and maintenance

9riteoff period class which defines a component lifetimes for calculation of depreciation

5ncertainty class# which defines the relative uncertainty for the ris- assessment



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The o&ective of another @uropean proect# A22+/7PTI>5> was the calculation ofthe overall financial &udget of all -inds of access solutions

In result a networ-planning tool has &een developed# which ta-es into account" the

system cost# operation and maintenance costs# lifecycle costs and the cash &alance of

the proect

In the 7PTI>5> proect the networ- evolution costs are also considered* The tool

com&ines low level# detailed networ- parameters with high level parameters# which is

seen as the -ey feature of the 7PTI>5> methodology and the tool

The structure of the 7PTI>5> tool is shown in the igure 2*.

T@RA was a proect reali!ed within the AT< Programme ?142000$* ompared to

its predecessor# the T@RA tool aims at the study of architectures spanning the whole

telecom networ-# not only the access networ- part ?http"//wwwnrc*

no-ia*com/tonic/description/&g*htm$

http://wwwnrc/http://wwwnrc/


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The framewor- of the T@RA technoeconomic evaluations is shown inthe igure 2**

The geometric planning model is an optional part of the T@RA tool* The

model is used to estimate the amount of ca&le/fi&re and ducting re)uired

in the networ-7n the conceptual level the geometric model is a function that ta-es

several inputs such as su&scri&er density# networ- topology ?star# ring#

&us$# average ca&le over length# duct availa&ility# etc* and gives two

outputs# which are the total amount of ca&le/fi&re re)uired in the networ-

and the total amount of new duct re)uired*

The TITA8 networ- model is a part of the T@RA tool



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ECONOMICAL MO+ELING O& PLANNINGMO+ELS



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A 6usiness Plan presents the calculation of the financial

indicators that ena&le the managers to evaluate the financial

performances of an enterprise in order to ta-e &est decisions

for the overall operation

ue to the high num&er of alternatives today and the need to

find economic feasi&ility in competition# the &usiness

evaluations are &eing used not only for the &usiness plan itself

&ut as an iterative evaluation of those technoeconomical

alternatives to select the ones that perform &etter in thecompetitive mar-et

BUSINESS PLANNING


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A &usiness plan summari!es the results of the planning process

The o&ectives to reach ? su&scri&ers demand# sales$

The future revenues epected from the plan and per service class

The planned epenses ?investment and operations$ as overall and perservice class

The accounting statements and the financial indicators characteri!ing

the profita&ility of the proect

The framewor- structure for the evaluation follows the model ofthe figure* @ach &o is epanded with more degree of detail as a

function of the plan time frame with the corresponding des

aggregation

BUSINESS PLANNING


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B#)!ne)) mo"el )tr#*t#re 2or plnn!ng

BUSINESS PLANNING


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@conomical modeling to evaluate networ- solutions ?modeling

tariffs# e)uipment costs per type# economy of scale# lifecycle#

e)uipment deployment# elasticity# trends with time$

ECONOMIC MO+ELING &OR PLANNING


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ue to the high num&er of new services and large variety ofmar-eting characteristics# one of the most interesting planning

activities when operating 8%8 is the economic modeling of the

services costs# revenues and profita&ility# either per single service or

for groups of services in the case of a &undle offer

The service related modelling is a su&set of the overall 8%8

economic modelling that represents with less detail the analysis of

technological variants and for a given networ- solution models with

more detail the demand# dimensioning# tariffs# revenues and

profita&ility of the services themselves



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In order to consider correctly the per service impacts on the

networ- and &usiness# it should &e differentiated in all

economic evaluations those values due to"

The overall operation company

The glo&al networ- solution

The &road&and platform needed for all new services

The specific platform for each service type



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>odelling and differentiation of resources# cost drivers# revenuedrivers with the corresponding cost allocation per service type is a

must for the -nowledge of impact from each service and to decide

the introduction strategy per service or service &undle

>aor cost drivers for multimedia service re)uire the evaluation of alldimensioning units li-e"

8um&er of 5sers

8um&er of 66 ports

AP< ?all Attempts Per


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Those units# dimensioning and costing has to &e performed for thefollowing networ- resources"


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7perational epenses also need to &e modeled with differentiation perservice type and service group# &oth for the technical operation#

maintenance# software upgrades as well as for the mar-eting# promotion#

training# etc* that will &e important at the first years of the new services

or all the common costs either due to 66 platforms as well as for common

networ- resources and overall company operation# a sharing factor has to

&e evaluated also as a function of partial consumed resources that will

aggregate to the specific cost

>aor revenue drivers for multimedia services need to consider the contract fee#

monthly fee and usage/traffic dependent fee# either in erlangs# >&s# time# delivery

unit ?ie" video film$ etc*

ue to confluence of many new multimedia services of heterogeneous types# it is

fundamental to -eep trac- of consumed resources per service type in order to &e a&le

to perform &ac-ward cost allocation as a function of utili!ation



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This will allow a latter calculation of proper tariffs to o&tain the serviceprofita&ility either for single services or services &undles and to ensure

fulfillment regulation principles when activity &ased costing is used

or those services provided in a shared mode &y multiple players# li-e

video content# gaming# etc* sharing factors among players have to &e

applied for the evaluation of glo&al revenues and partial revenues to &e

incorporated to the operator income

ecision ma-ing of which service is introduced first# which grouping or

services and for what customer types will &e function of the profita&ility

of those alternatives that have a high sensitivity to the services mi &y theeconomy of scale factors* That high impact on the economy of scale is the

main driver for convergence of services and the interest of Ctriple playD

and Dmultiple playD strategies


CYCLE LI&E AMORTIATION %ERSUS


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The telecom e)uipment and infrastructure have to &e installed at periodical intervals as afunction of the demand evolution

That intervals or provisioning periods for a given technology are a function of the demandgrowing rate# the systems capacity and modularity# the life cycle of the installed e)uipmentand the corresponding associated costs

The diagram &elow illustrates three provisioning scenarios for a given demand over time"

In scenario A# the provisioning is performed at short regular periods ?say yearly or )uarterly$ minimi!ing the spare

capacity &ut increasing the installation costs &y the high num&er of intervention' in addition an unepected demand

grow at higher rate will imply under provisioning and lost of )uality of service as well as of customers

In scenario 6# the provisioning is performed for the epected demand over a long period or Conce for allD with a

high startup cost in AP@N and high maintenance for an installed e)uipment with low utili!ation rate

In scenario # the num&er and volume of provisioning is optimi!ed to minimi!e ost of 7wnership that considers

&oth AP@N and 7P@N while maintaining ade)uate utili!ation rates and Muality of


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The dynamic optimi!ation pro&lem in networ- planning ta-es carefor the optimum provisioning periods and volumes in order tominimi!e costs and is a function of the following parameters"

emand growing rate and forecast relia&ility

@)uipment capacity and modularity Technical life cycle and capa&ility to provide new services

@conomical lifecycle

@)uipment fied costs and incremental costs

7perational and maintenance costs

=a&our costs

Interest rate and inflation rate


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In the case of availa&ility of new technologies of the samefunctionality with larger capacities or when new functionalitiesappear li-e in the networ- migration towards 8%8# the

decisions to &e ta-en &y the planner introduce additional

scenarios" Increase of capacity with same technology modularity ?ie" more 1

systems$ versus umping to the net technology modularity ?i"e"su&stituting 1 &y 4 or 1+$


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Strteg!e) o2 net5or6 re)o#r*e) "eplo4ment **or"!ng to l!2e*4*le n" e*onom!*)


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In these types of scenarios# in addition to the previous parameters# thepossi&ility to provide same services with additional su& networ-s andthe possi&ility to provide new services not feasi&le with installedtechnologies# introduce additional compleity in the technoeconomical evaluation &y the need to incorporate in the evaluation the

differential revenues &y those new services

Fey parameters that most influence on the decision are the degree ofe)uipment o&solescence or remaining time of the life cycle period# thenew customers grow rate and the epected cash flows &y the newservices

The evaluation process has to consider and compare the 8et PresentHalue ?8PH$ of potential alternatives with all costs and revenues peralternative with the discounted cash flows


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The proper selection of those alternatives that" first fulfil theprofita&ility re)uirements and second provides &etter 8PH and

Internal Rate of Return "IRR# will give the decision to the planner on

the e)uili&rium &etween the amorti!ation versus moderni!ation or

su&stitution &y the new generation technology

The large variety of scenarios in actual networ-s do not allow a

generic recommendation# although it is common that in new

%reenfield areas and with o&solete e)uipment that has to &e

renovated anyhow it may &e recommended the installation of new

generation systems once all technical capa&ilities are availa&le andproved


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Also it is fre)uent that for modern e)uipment with re)uiredfunctionalities and many years remaining to fulfil the life cycle#

su&stitution is delayed until economically feasi&le

This com&ination of decisions is called cap and gro$ and is the

more fre)uent today# &ut for every country# region and servicesdemand scenario# the 8PH and IRR have to &e evaluated in order to

ensure not only positive &usiness results &ut also results in line with

&enchmar-ing values in order to survive in a competitive

environment


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Q & A


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Q & A


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Ce%e' o) Co%s*l$%+, $%d Te+(%olo&, T'$%s)e'

Research Institute of Posts And Telecommunication

Telep$one1 78 8 9 :;< =79/> 78 8 9 :;8 887

part 2.2 methology planning

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