Amman, Jordan, 4 – 7 December 2006 Strategic Management – Part II Forecasting Lecture 13

1. Amman, Jordan, 4 – 7 December 2006 Strategic Management – Part II Forecasting Lecture 13 Localised demand ITU/BDT/ HRD Strategic Management / Localised demand

2. The location of the demand Forecasts are set up for every elementary service area for determining the lay-out of the infrastructure and the dimensioning of equipment. What do we need at a very low geographical level ? Now: NGN-all-IP network Fixed-mobile convergence multiservice environment Bandwidth needs Characteristics of services Types of access In the past:PSTN environment voice was prevailing number and traffic of potential customers ITU/BDT/ HRD Strategic Management / Localised demand

3. Localised demand • Localised demand is important for the dimensioning of the equipment in every local service area. • Fixed networks: • Outside plant with main cables and distributing cables • Optimisation of cabinet areas and local exchanges. • Expensive fiber optic network for broadband access ITU/BDT/ HRD Strategic Management / Localised demand

4. Network design • Narrowband • Broadband • Wireline: Copper line, optical fiber • Wireless: WiFi, WiMax • Cellular: 2G, 2,5G, 3G, 3,5G, 4G Demand forecasts are important, even for flexible wireless technologies, for budget optimisation and for quality of service. Traffic bottlenecks are the major issue with BTS. ITU/BDT/ HRD Strategic Management / Localised demand

5. Local Loop Elements Underinvestment in outside plant prevent operator from delivering ADSL, which is a major issue. Efficient OSP network design should reduce infrastructure costs with respects of the technical constraints and local usage, but give enough flexibility to allow network extensions. Local Switch Distribution frame RSU Street cabinet Street pillar Aerial cables Drop wires Buried cables (Ducts) Distribution Pole ITU/BDT/ HRD Strategic Management / Localised demand

6. Importance of forecasts More than 30% of fixed assets are in the outside plant. Low occupancy rate means “sleeping gold” Inaccurate forecasts for cabinet areas in the fixed networks cause low occupancy rates in some areas while they are large waiting lists in other areas. ITU/BDT/ HRD Strategic Management / Localised demand

7. Access Network Architecture:Multiservice DLC (Digital Loop Carrier) ITU/BDT/ HRD Strategic Management / Localised demand

8. Access structure with switching - DLC based solution METROPOLITAN SUBURBAN VILLAGES RURAL RSU DLC POTS ADM ISDN LL SWITCH ITU/BDT/ HRD Strategic Management / Localised demand

9. XBS XBS STM 16 Access structure with WLL based solution OMS Local exchange POTS 2 Mb/s WNT 2 Mb/s RSC RST ISDN-BA OMS n STM 1s WNT WNT RST 2 Mb/s Leased Lines WNT RSC RST A correct lay-out is very crucial for WiFi, WiMax and optical fiber access. RST ITU/BDT/ HRD Strategic Management / Localised demand

10. Top-down methods First : calculation at the national level, Then breakdown of national forecasts between regions and cities, then breakdown between local service areas and cabinet areas Advantages Forecasts on large numbers are more reliable Easier and faster to implement Suitable with political objective at the national level Disadvantages Splitting rules of forecasts are arbitrary ITU/BDT/ HRD Strategic Management / Localised demand

11. Bottom-up methods First : forecasts for every local service area and cabinet area (field surveys street by street, for every district, every village, ..) Then aggregation of these local forecasts at the regional level, then aggregation at the national level Advantages Takes into account various levels of development and specific cases Disadvantages Time-consuming and expensive for individual surveys No overall result before a full coverage of the whole country Highly experienced specialists are requested for leading the process ITU/BDT/ HRD Strategic Management / Localised demand

12. Bottom-up difficulties Lack of reliable and recent socio-economic data at a detailed geographical level and with a market segmentation according tocustomer categories as requested. An objective of field surveys is to provide forecasts for the network dimensioning and to detect saturation sufficiently far in advance. Methods for marketing studies are more complicated. The density is a ratio between a socio-economic data, which is established according to administrative areas and a customernumber, which is given according to a telecommunication servicearea. Moreover, both types of areas are subject to changes over time. ITU/BDT/ HRD Strategic Management / Localised demand

13. Administrative and telecoms service areas administrative areas : social and economic data (households, employees telecoms service areas : main lines, waiting list ITU/BDT/ HRD Strategic Management / Localised demand

14. Demand forecast methodology Three complementary studies carried out during detailed survey to assess the existing demand and to forecast the next years : • marking detailed on-site field survey, • investigation by direct interviews of existing and potential customers, • micro-economic studies using the threshold method, using data from the last census. ITU/BDT/ HRD Strategic Management / Localised demand

15. Increasing the sales of new services Waiting list management where are people waiting for new services Field survey where are potential customers Construction of complete lines ready to sale how matching capacity and demand Sales promotion how to speed up the sales of available access Service provisioning how to speed up service delivery ITU/BDT/ HRD Strategic Management / Localised demand

16. Field survey • Objective : to anticipate the future demand and to design the infrastructure according to long term forecasts. - A field survey determines the possible number of lines to be installed in the future, based on the penetration of different services in the houses and the business buildings that are surveyed. - Surveyors scan local service areas, street by street, and count thenumber of houses and business buildings by category. - A penetration rate is assigned at each category of service and category of customer. ITU/BDT/ HRD Strategic Management / Localised demand

17. Typical action plan: Field survey Objective : to anticipate the future demand and to extend the network at the right dimension, at the right place, and at the right time. A field survey determines the possible number of fixed lines to be installed in the future, based on the penetration of telephone lines in the houses and the business buildings that are surveyed. Surveyors scan local service areas, street by street, and count the number of houses and business buildings by category. A penetration rate is assigned at each category. Same approach for the dimensioning of BTS for mobile networks. ITU/BDT/ HRD Strategic Management / Localised demand

18. Method for field survey Gathered data : Number of buildings distributed between residential and professional categories, Number of building of each category connected with one (or more) telephone line, and number of existing lines in each building’s category. Expected results : Accurate distribution of residential and professional buildings and existing line per category. Good knowledge of gross potential of non equipped locations ITU/BDT/ HRD Strategic Management / Localised demand

19. Method with interviews of existing and potential consumers Method : Sample of several hundreds of residential and business Interviews with a questionnaire prepared in advance. Processing of collected data by a specific software. Expected results : Qualitative analysis of subscriber’s equipment, appreciation or wishes, Appreciation of the non subscriber’s intentions, according to their location, income level and connection fees. These results are used to assess the short term demand. ITU/BDT/ HRD Strategic Management / Localised demand

20. Method with micro-economic study. Method : Set up a sample of representative areas. Use of economic available data from regional, municipal, local and sub-local levels : • population, • number of households (by category of housing), • income and expenditure of households. Expected results : • total number of solvent subscribers by category and per expenditure’s level. • the penetration factors to be used for the design of each area’s network, ITU/BDT/ HRD Strategic Management / Localised demand

21. Computer tools ITU/BDT/ HRD Strategic Management / Localised demand

22. Subscriber management ITU/BDT/ HRD Strategic Management / Localised demand

23. GeomarketingMethodology • LICENCE APLICATION • Define coverage policy • Population covered • Area covered • Locate traffic • Anticipate the traffic • ... ITU/BDT/ HRD Strategic Management / Localised demand

24. Geomarketing • Objective : to know the number and the traffic of potential customers at a very low geographical level. • Useful for the design of mobiles network and data network (IP, ATM, ...) • Use computerized sources of information: • vector maps (points and polygons boundaries) • roasters maps (digitized pictures with reference points) • data base with addresses and characteristics of customers • density of residential, list of enterprises per elementary area • cross references between customers location and coordinates on the maps • customers and traffic per elementary area ITU/BDT/ HRD Strategic Management / Localised demand

25. Rollout StrategyGeomarketing Data • Data available regarding Population : age, Occupation, economic sector, Urbanisation Households : size, race, revenues, dwelling, activity • The data allows to fine tune the phasing of the rollout and to know the relevant % of the population covered as well as the profile of the population covered ITU/BDT/ HRD Strategic Management / Localised demand

26. All geographical aspects such as area maps, customer locations or network layout are handled by a geographical information system (GIS). Geomarketing: crossing geographical maps and data bases (demographic, economic) ITU/BDT/ HRD Strategic Management / Localised demand