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Håkon Lønsethagen (Astrid Solem, Borgar Olsen) Telenor R&D

Feasibility of Bandwidth on-Demand Case study approach, models and issues Stuttgart meeting 19-20 th of September 2005 WP2.3/2.5. Håkon Lønsethagen (Astrid Solem, Borgar Olsen) Telenor R&D. Outline. Motivation and objectives of BoD case study Significant OPEX and CAPEX elements OPEX model

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Håkon Lønsethagen (Astrid Solem, Borgar Olsen) Telenor R&D

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  1. Feasibility of Bandwidth on-DemandCase study approach, models and issuesStuttgart meeting 19-20th of September 2005WP2.3/2.5 Håkon Lønsethagen (Astrid Solem, Borgar Olsen)Telenor R&D WP2 TEA

  2. Outline • Motivation and objectives of BoD case study • Significant OPEX and CAPEX elements • OPEX model • CAPEX and OPEX related to Network and Service Management • Traffic sources and assumptions • Resource efficiency gains • Tariffs and income • Further work WP2 TEA

  3. Motivation and objectives of BoD case study • Scope • Network operator deploys BoD and/or “dynamic” (L1) TE capabilities • Given the context of a L1-L2 network offering L1 and CO-PS services, typically L1 and Ethernet services • Services offered to Business customers, Service providers, and internal services • Motivation • More efficient resource usage • OPEX and CAPEX savings • Increased Income • Objectives • To explore and analyse issues related to feasibility of BoD • Find significant OPEX and CAPEX changes compared with traditional leased lines and with ASTN based leased lines • Find potential network resource efficiency gains • Find potential increased demand for bandwidth • Find potential new revenue and income WP2 TEA

  4. Significant OPEX and CAPEX elements that should be studied • Making some rough estimates on which are significant OPEX and CAPEX elements • OPEX • Service activation, deactivation and bandwidth upgrade/change • Equipment and SW licences • Charging and billing • Maintenance of equipment and components • Network management (e.g. SLA assurance) • Sales and marketing, Customer acquisition • Customer care • CAPEX • Control plane • IT/OSS integration and new SW and licences • Customer provisioning • Service management, activation and assurance • Control Plane management • Charging and billing • Customer care WP2 TEA

  5. OPEX model • Initial focus – Service management and bandwidth change • The most significant OPEX element • Have used Siemens/IMEC OPEX model cost elements for traditional and ASTN service provisioning • ASTN OPEX cost assessment vs. BoD OPEX cost assessment • Using connection length and bandwidth categories (granularities) WP2 TEA

  6. OPEX model – Service management SO CEC SA SCh CnR CEU SMo SCe SO Service Offer CEC Customer Edge (CE) Configuration/Provisioning SA Service Activation SCh Service (Bandwidth/SLA) Change SCe Service Cease CEU CE Upgrade CnR Contract Renegotiation SMo Service Move WP2 TEA

  7. Norden Hamburg Berlin Bremen Hannover Essen Düsseldorf Dortmund Leipzig Köln Frankfurt Mannheim Nürnberg Karlsruhe Stuttgart Ulm München Use of existing workService categories • No separate CAPEX-model developed • The existing German reference network is taken as a basis in order to derive parameters for the model, that is: • The total traffic to be handled • Number of hops used to model ”lengths” • Number of connections • The registration of types and number of leased line services in Telenor equivalent to the categories: • n*10M • n*100M • n*1G • Lambda WP2 TEA

  8. Services The registration of types and number of leased line services in Telenor equivalent to the categories: • n*10M • n*100M • n*1G • Lambda Is used to find the % of bandwidth consumed by each traffic category And thus the number of connection of each traffic category in a network handling the traffic according to the German network WP2 TEA

  9. Norden Hamburg Berlin Bremen Hannover Essen Düsseldorf Dortmund Leipzig Köln Frankfurt Mannheim Nürnberg Karlsruhe Stuttgart Ulm München Traffic sources and assumptions Service categories n*10Mbs n*100Mbs n*1Gbs n*Lambda 2Mbit/s X% …. 2,5Gbit/s Y% Lambda Z% % of traffic for different service categories Total traffic - 3035 Gbit/s Scaled to network of German network size WP2 TEA

  10. Number of service changes % of traffic for different traffic categories Scaled to German network Number of connections for different traffic categories Growth rate Yearly number of connections for different traffic categories Provisioning options: • Freely allocatable • Customer decided • Leased lines BoD Case: Percentage of connections in each traffic category and provisioning option Traditional case: Holding time Traditional case: % of service changes BoD Case: % of service changes for each traffic category and provisioning option WP2 TEA

  11. Total cost for service change • Number of service changes for each traffic category • For each traffic category the percentage of short, medium and long connections are the same • Percentage of connections with different lengths is derived from German network • Short: 1-2 hops • Medium: 3-4 hops • Long: >4 hops • The unit cost for traditional and BoD service change (depending on granularity/service category and length) WP2 TEA

  12. Cost per service change • It is assumed that cost per service change will depend on length and traffic category • Input: Cost per service change Lambda traditional and ASTN (from Siemens/IMEC work) • Service change unit cost - Traditional case • A granularity multiplier is used to derive cost for the other traffic categories, resulting in cost for medium length connections for all granularities • Cost for short and long lengths for Traditional case is derived using the Length multipliers traditional • Service change unit cost - BOD case • Derived from Unit cost traditional and BoD/Traditional cost reduction factors for BOD medium length • Unit cost for short and long is derived from BOD unit cost medium length through use of BoD length multipliers • Method TO BE FURTHER ASSESSED • BoD is likely to require a greater cost reduction, compared with the Siemens/IMEC study, in order to be attractive WP2 TEA

  13. Unit cost for service change Initial “guesses”: WP2 TEA

  14. Further work – Input needed • Consolidated NOBEL cost model • Further work needed (?) • Control Plane cost model • OK? • Running/Support licence costs? • CAPEX and OPEX related to IT/OSS • Initial cost, initial licence cost, system integration/modification cost, running licence cost (+ other IT/OSS OPEX cost) • Service Activation • New and/or system integration/modification • Service Assurance • New and/or system integration/modification • Charging • New mediation components and system integration/modification • Billing • System integration/modification • Development of a NOBEL IT/OSS cost model? • Who can provide what input? WP2 TEA

  15. BOD Resource efficiency (CAPX) gains Motivation for BOD is to utilize temporal traffic variations between given end-points: • Typically in the time range of minute – month • (limited by packet switching in the lower limit and leased lines in the upper limit) Competing technologies are • Leased lines (based on SDH or l) • Packet switching (e.g. MPLS-based VPNs) Possible result: BoD is feasible if BoD for L1/L2 and BoD for L3/L2 is introduced into the market WP2 TEA

  16. BoD performance gain Gain potential • BoD efficiency somewhere between leased lines and packet switching • Granularity in time and capacity determine where: • frequent (relative to traffic variations) changes in small steps ~ packet switching • infrequent changes in large steps ~ leased lines • Gain will vary significantly depending on traffic sources • 10% - 20% - 40% ??? Interesting types of traffic variations • Periodic (e.g. daily) variations, e.g. different busy hours between • Residential and business data traffic • Between ISP traffic and mobile traffic • Large timescale stationary stochastic variations • Existing results?? WP2 TEA

  17. Pricing model – Assumptions and approach • To develop a Pricing model for BoD services • Expected increase in demand due to price reduction • Approach: • Based on existing number of connections for traditional case: • What is the income we have to match (per hour?) • With the number of connections for BOD case – what amount of cost reductions can be achieved? • Make a scaling matrix for tariffs with length and capacities relative to a given tariff (reference: n*10M and short set to 1) • Multiply with the number of LL traditional contracts • Do the same for BoD but distribute the tariffs according to holding times or 1/ frequency of changes, possibly taking into consideration categories (Freely allocatable, Customer decided and LL types) • Normalise BoD tariffs to match LL traditional contracts to find the typical tariffs for the BoD services WP2 TEA

  18. Income – assumptions and approach(Example) Scaling factor for services: Nr of LL as reference: Revenue of BoD Revenue of LL 90 days as reference To be done!! WP2 TEA

  19. Further work – Open issues • Tariff models • Rough estimation of potential resource efficiency gains • Demand changes – as a result of BoD • Estimation of service change unit costs • Rough estimation of IT/OSS related costs • Analysis and summary of the initial rough estimations and results WP2 TEA

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