Base Station Operation Increases the Efficiency of Network Construction, Supporting Full-service Transformation for Mobile Operators

Base Station Operation Increases the Efficiency of Network Construction, Supporting Full-service Transformation for Mobile Operators

Inevitable Full-service Transformation for Mobile Operators

Intensified competition and slow revenue growth drive an increasing number of operators to pursue full-service operation. Operators differentiate advantages through integrated services based on the synergy of fixed broadband (FBB) and mobile broadband (MBB). Implementing fixed mobile convergence (FMC) has become a new norm for the business development of operators.

Global operators are gradually implementing FMC transformation, and among them, increasing numbers of mobile operators are set to build fixed networks. With the diversification of user demands, mobile operators face fierce competition from integrated operators, multiple system operators (MSOs), and over-the-top (OTT) service providers. The provision of single mobile services cannot fulfill user demands for diverse services or handle new levels of competition. Additionally, with demographic dividends gradually disappearing over recent years, mobile operators are pressured by falling revenues. Voice service revenues decrease yearly and data services attract more users but do not bring in higher revenues. These operators urgently need new services in order to increase revenues. In the FBB market, 52% of households globally have not used FBB, 1.1 billion households are yet to be connected to networks, and the average FBB access rate of 90% countries is lower than 25 Mbit/s. These figures indicate the huge potential that exists in the FBB market. Therefore, it is inevitable that mobile operators will develop FBB on a large scale and shift to full-service operation. As of the first half of 2017, over 100 global operators focusing on mobile services have announced that they would invest more in FBB services.

Long ROI Period for Fixed Network Construction Challenges Mobile Operators

Traditional FBB network construction relies heavily on pipeline resources, but these resources are a weakness for mobile operators. Most mobile operators around the world have only a small number of fibers at the core and convergence layers. These pipeline resources, whether they are built or rented, lead to excessively high costs. In fiber to the x (FTTx), for example, external line engineering generally accounts for approximately 70% of the total costs. Most of the engineering costs are created by trench digging, cable burying, and manhole construction. This example shows that mobile operators have to invest huge amounts of capital to obtain pipeline resources. In addition to high construction costs, mobile operators also face difficult rights of way (ROW) approval and long-period pipeline construction, which are key factors that hinder fixed network construction.

How can mobile operators fully exploit their advantages to efficiently build networks? The answer to this question determines whether they can successfully achieve service transformation.

Base Station Operation: Efficiently Developing Fixed Networks Based on Base Stations

Huawei offers a range of FMC solutions to address the challenges faced by mobile operators during full-service transformation. These operators own many base stations, so Huawei provided the idea of "base station operation", aiming to help them rapidly build fixed networks through fixed-mobile synergy.

The idea behind base station operation is to develop FBB around base stations. This construction mode can fully utilize mobile operators' large quantities of base stations. Under this mode, operators reuse existing wireless station sites, cabinets, power supplies, and backhaul resources, and deploy mini optical line terminals (OLTs). They do not need to implement outdoor engineering or optical distribution network (ODN) planning, engineering, deployment, or O&M. These mobile operators are able to use fixed-mobile synergy to quickly build FTTx networks.

Unlike traditional FTTx network construction, base station operation supports small, fast, and flexible network construction, greatly lowering thresholds for mobile operators to build fixed networks. Base station operation allows mobile operators to fully use existing base stations, realize fixed-mobile backhaul sharing, and flexibly and rapidly roll out network coverage, without requiring any new sites or ODN planning.

During the implementation of base station operation, operators are advised to preferentially select the base stations with backhaul fibers routed to meet future user demands for increasingly high bandwidth. In the early phases of projects, they are advised to preferentially route cables between base station buildings and adjacent buildings to shorten cabling distances and reduce cabling costs.

According to the analysis of FTTx costs of operators in 12 countries across 6 regions, the ROI period of base station operation is generally 3 years, about 3–4 years fewer than that in traditional network construction.

These results indicate that base station operation can help operators efficiently build networks and effectively shorten the ROI period.

Base Station Operation Has a Bright Future

According to Huawei's Wireless Network Market Insight statistics, global mobile operators have a total of about 6 million physical base stations. Through base station operation, these operators can deploy FTTx across the world more efficiently, meeting users' demands for diverse connections and experience. To date, Huawei has cooperated with dozens of leading operators from countries including Mexico, Thailand, Indonesia, the Philippines, Morocco, Panama, and Kenya to quickly deploy FTTx networks through base station operation. As base station operation is promoted, more mobile operators will use this mode to construct fixed networks, accelerate FMC development, and achieve full-service transformation.

In conclusion, during FMC development, base station operation enables mobile operators to make precise investments, efficiently build networks, and greatly shorten the ROI period. This enables them to better cope with full-service competition and succeed in business transformation.