By Anil Singh, director, RAN product management, Guavus
Worldwide, operators are investing heavily in LTE. Global capital spending on LTE infrastructure is expected to reach $36.1 billion next year, according to IHS iSuppli Research.
Operators need LTE because it improves spectral efficiency, and it enables them operators to transport the rapidly growing volume of mobile IP data traffic with greater cost-effectiveness compared to 3G.
But Cisco estimates that by 2018, LTE network connections will generate six times more traffic on average compared to 3G connections. LTE is already creating extreme traffic trends, driven by mobile video.
Shortly after introducing LTE in 2012, Vodafone Germany reported that non-revenue producing mobile video drove 85 percent of its LTE traffic, with reports suggesting money-making services using the remaining 15 percent.
Vodafone’s experience reveals the challenges of monetising LTE for popular consumer services, especially in an overall environment of stagnating revenues.
In some regions, like North America, operators have increased their average revenues per user (ARPU) with LTE, according to ABI Research. However, LTE has not reversed the global trend of declining ARPU, according to ABI.
In fact, the research firm expects North America’s LTE ARPU to begin declining next year as competition intensifies and more price-sensitive customers enter the market. Because of these challenges, operators need to cultivate a highly informed ROI-consciousness for every LTE planning, deployment and optimisation decision they make.
As such, having the ability to correlate key performance indicators (KPIs) for RAN and business conditions in real-time will be a major advantage.
The insights produced will enable operators to make smarter and faster decisions based on the forecast ROI impacts of their RAN spending options.
For example, an operator that is testing RAN hardware or software components can now analyse subscriber throughput, spectral efficiency, call drop rates and other network KPIs in conjunction with the cost per bit to deliver data, customer ARPUs and a whole host of other business and subscriber metrics.
Operators can then apply capex and opex data to the analytics to establish a technology’s ROI.
Mobile video and VoLTE are two important use cases for this approach.
Operators that are striving to optimise LTE capacity and services for video can now evaluate the specific engineering requirements they need to achieve in conjunction with the cost implications and user experience impacts of various technology strategies under consideration.
Operators that are developing VoLTE deployment strategies can identify RAN quality-of-service and other performance factors that can impact VoLTE services, track the service’s adoption among high-ARPU customers and make sure the RAN is configured on a per-cell site basis to best serve these customers.
The type of site-by-site operational intelligence can provide a much more granular and localised level of insight for operators than has previously been achievable.
For example, it can reveal how much of the RAN is delivering the best performance for least cost and it can identify sites and configurations that are best suited for new features, which minimises the risks associated with network-wide deployments.
This type of intelligence can help operators configure a high-performing and efficient infrastructure that encourages improved subscriber engagement. The intelligence can also inform new pricing strategies to help operators improve ARPU and profitability.
The challenging economic environment in which LTE is coming to market calls for precise, ROI-aware approaches to infrastructure deployment, network optimisation and service introduction.
Fortunately, operators already have the business intelligence they require to do so within the data streaming across their networks.
The big data analytics revolution is providing them with the capabilities they need to correlate key engineering and business metrics to fully explain the implications of their most important capex and opex spending decisions.
By cultivating an ROI awareness of their LTE network decisions, operators can move forward confidently with new service offerings in their markets while strategically managing costs and minimising risks.
Have you registered to attend our SDN/NFV & Managed Services day on 3 Dec? Click here to come and see Orange, BT, Juniper Networks, Ciena, Amdocs and more