Sie sind auf Seite 1von 24

Industry presentation

Conceptual approach for


a mobile BU-LRIC model
Graham Johnson, Ian Streule, Ignacio Gómez Vinagre,
Guillermo Fernández Castellanos
13 April 2011
Ref: 15235-142
2

Copyright © 2011. Analysys Mason Limited has produced the information


contained herein for ANACOM. The ownership, use and disclosure of this
information are subject to the Commercial Terms contained in the contract
between Analysys Mason Limited and ANACOM

Ref: 15235-142
3

Contents

Introduction

Proposed conceptual approach

Ref: 15235-142
Introduction 4

Project objectives [1/2]

 ANACOM has commissioned Analysys Mason Limited


(‘Analysys Mason’) to develop a bottom-up long-run
incremental cost (LRIC) model to understand the cost of
mobile voice termination in Portugal
 The model will be used by ANACOM to inform its market
analysis for mobile termination:
 we will adopt a pure LRIC approach following the EC

Recommendation* on wholesale termination costing as


requested by ANACOM
 Throughout this process, ANACOM and Analysys Mason have
been seeking the input from mobile operators and other
industry players
Ref: 15235-142
* http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:124:0067:0074:EN:PDF
Introduction 5

Project objectives [2/2]

 As part of this effort, ANACOM is conducting a public


consultation with the industry to obtain input on the principles
used in the model:
 we discuss those principles in the following slides
 the concepts presented in the ‘Conceptual approach for a
mobile BU-LRIC model’ attached to ANACOM’s
consultation are marked with the symbol N in the top-right
corner of each slide

Ref: 15235-142
Introduction 6

The cost model will be designed


according to four key dimensions
Operator
• Structural implementation
• Type of operator
• Footprint
• Scale of operator

Services
Technology
• Service set
• Technology and Conceptual issues • Traffic volumes
network architecture
• Accounting of wholesale
• Network nodes
costs and retail costs

Implementation
• Increments
• Depreciation method
• Weighted average cost of
capital (WACC)
Ref: 15235-142
7

Introduction

Proposed conceptual approach

Ref: 15235-142
Proposed conceptual approach • Operator 8

We have considered a range of


operators to model
 We have considered a range of
Characteristic Discussion points
operators:
Date of entry • Different for all operators, therefore
 average operator – players in the average date of market entry is
the mobile market are averaged to not meaningful

define a ‘typical’ operator Technology • Technology migration is apparent


for the access network, but more
 hypothetical existing operator – difficult to define in the core
based on actual operators, except network

for specific aspects, e.g. date of Efficiency • An average operator may include
inefficient costs
market entry
Transparency • Making a clearer technology choice
 hypothetical new entrant – an enables transparency
operator entering the market now Reconciliation • Data for a new-entrant operator
with today’s modern network cannot be reconciled with
top-down accounts as there are
deployment
no new entrants in Portugal

Ref: 15235-142
Proposed conceptual approach • Operator 9
1 4 9 13 17
We propose to model a hypothetical
existing operator
 This will enable us to calculate the Mobile network
costs that are based on those incurred
 Rolling out 2G in 2005/2006
by existing suppliers of mobile
termination in Portugal  Launching service in 2006/2007
 The characteristics of an actual  Adding capacity with 1800MHz
modern network can be taken
into account  Adding overlay with 2100MHz
 The costs associated with the  Operating 2G and 3G networks
deployment of network nodes in the long term
will be calculated using a modified
scorched-node approach, which will  Progressive migration from
ensure a network design that is 2G to 3G
modern and reasonably efficient

• We propose to model an hypothetical existing operator


• The model will use a time series of 45 years – three 15-year
spectrum licences – to calculate the costs of long-lived assets
Ref: 15235-142
Proposed conceptual approach • Technology 10

Market entry and deployed technologies


are key inputs to the model …
Long ago 1991 2000 2004 2011 2020

Vodafone 2G (national)
Although the initial date of
Vodafone 3G
market entry and technology
TMN 2G (national) migration varies among
TMN 3G Portuguese operators, a
Optimus 2G (national)
consistent picture has
emerged from 2004 onwards
Optimus 3G

2001: Allocation of
3G licences

Ref: 15235-142
Proposed conceptual approach • Technology 11
2 3
… as well as coverage and long-run
market share
 Coverage (footprint) of the network
will be a key input to the model: EC Recommendation on
wholesale termination costing:*
 the degree to which investments 20% market share for an operator
precede demand has an impact with efficient scale
on the unit cost of traffic
 In order to reflect reality, the
modelled operator should offer Hypothetical mobile operator that:
national coverage: • rolls out a national network

 >99% of population for 2G • achieves a market share of 20% in


the long term
 >80% of population for 3G

Ref: 15235-142
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:124:0067:0074:EN:PDF
Proposed conceptual approach • Technology 12
5
The mobile radio technology is a
mix of GSM900/1800 and UMTS2100
 Current spectrum allocation  GSM/UMTS seems to be the
is similarly distributed: current efficient technology mix:
 operators own similar amounts  all existing operators

of spectrum in 900MHz use a GSM/UMTS mix


 they operate in a competitive
 the allocation of 1800MHz and
market, thus stimulating the
2100MHz paired spectrum is
efficient use of technology
symmetric
 it is recommended by the EC
 It is therefore assumed that
 4G is unlikely to be used to deliver
forward-looking spectrum and large volumes of voice termination
coverage costs are symmetrical in the short term
We will assume that the modelled
operator has similar amounts of We will use both GSM900/1800 and
spectrum as the existing operators UMTS2100 radio technology in the
(28MHz of GSM, 26MHz DCS and long term, with UMTS as an overlay
220MHz of UMTS frequencies)
Ref: 15235-142
Proposed conceptual approach • Technology 13
6
Mobile spectrum fees will also need to
be defined
 Spectrum fees have historically  For all spectrum:
been assigned by different
 yearly fees that take into
mechanisms (e.g. auction,
account the change from the
allocation, extension, trade)
pre-2009 to post-2009
 According to the EC
calculation method, taking into
Recommendation, only additional
spectrum acquired to provide the account the migration period
wholesale termination service 2009–2011
should be taken into account:  For 40MHz of 2100MHz:
 3G spectrum shall not be
considered incremental in  initial fee paid by operators of
the pure LRIC model PTE20 billion per licence
 2G spectrum will be analysed
We propose to use the actual amounts
based on its sensitivity for paid for spectrum by Portuguese
wholesale traffic termination operators as input to the model

Ref: 15235-142
Proposed conceptual approach • Technology 14
7 8
For the mobile core network, there are
3 similar plausible architectural options
(a) Separate (b) Upgraded (c) Combined IP Transmission
switching switching switching options
Internet Internet Internet

2G 3G Data routers
GSNs GSNs GSNs
and GSNs
 Leased lines
PoI PoI
 Self-provided
MSS PoI MSS
microwave
2G 3G
2G/ 2G/ links
3G 3G MGW MGW
MSC MSC
MSC MSC
BSCs RNCs
BSC / BSC / BSC/ BSC/  Leased and
RNC RNC RNC
RNC
owned fibre
network
2G radio 3G radio 2G radio 3G radio 2G radio 3G radio
layer layer layer layer layer layer
Proposed option

Option (c) ‘Combined IP switching’ represents the most modern


switching technology that an efficient operator would have
deployed in recent years
Ref: 15235-142
Proposed conceptual approach • Services 15
14
The model needs to consider more
services than just voice termination
 The aim of the model is to  A full list of services needs to be
understand the costs of mobile used in the model:
voice termination
 this will allow allocation of
 However, mobile networks shared and network common
typically provide a wide range of costs
services, leading to:
 economies of scale and scope
 a lower unit cost for voice and
data services

Retail costs will be excluded – a ‘network share’ of business


overheads (e.g. Chief Executive Officer) will be specified

Ref: 15235-142
Note: The model will output the cost per minute of mobile termination for the time series of 45 years
Proposed conceptual approach • Services 16
11
The model must capture all common
services (at a network* volume)
Mobile services
• On-net calls
• Outgoing to international, fixed and other mobile operators
• Incoming to international, fixed and other mobile operators
• Roaming in origination and termination
• SMS on-net, outgoing and incoming
• 2G packet data
• Low-speed 3G packet data (Release-99)
• High-speed 3G packet data (HSPA)

The model will capture all common services

Ref: 15235-142
*MVNOs and service provider volumes will be included in the modelled network operators
Proposed conceptual approach • Services 17
10 12
A traffic forecast based on current
market averages will feed the model
Mobile voice traffic in Portugal (2002–2010)
25 Price competition in Portugal has
led to very low on-net tariffs
that have driven
20
the main growth in traffic
Minutes (billions)

15

10
• The network will be
5 dimensioned on the basis of
both voice traffic and data
traffic requirements
0

2002
2003
2004
2005
2006
2007
2008
2009
2010
Traffic is forecast to reach
1300 minutes per annum,
Mobile->on-net Mobile->off-net mobile of which 21% is wholesale
termination traffic
Mobile->fixed Mobile->international
Ref: 15235-142
Source: ANACOM
Proposed conceptual approach • Implementation 18

A number of choices must be made


when implementing a LRIC methodology
 A number of areas need to be considered:
1 what size of increment?
– e.g. marginal, service incremental or average
incremental
2 what depreciation method?
– e.g. economic depreciation, accounting depreciation
3 reasonable return on capital?
– WACC

Ref: 15235-142
Proposed conceptual approach • Implementation 19
15
1 Pure LRIC will be applied,
as recommended by the EC
 The increments used in models to A small increment for
LRMC**
calculate the cost of mobile the marginal unit of
traffic
termination have evolved over
time, from LRMC to LRAIC, LRIC*
and pure LRIC nowadays
LRAIC An average increment
 Pure LRIC defines the increment for multiple services
(e.g. traffic)
of an entire service and:
Total costs
 considers the increment to be
all traffic of a single service
 incremental costs are those
avoided when not offering the The increment of
LRIC an entire service
wholesale termination service (e.g. termination)

*LRMC = long-run marginal cost;


LRAIC = long-run average incremental cost; **The colour-filled boxes indicate the costs included Ref: 15235-142
LRIC = long-rung incremental cost in the unit cost of terminated traffic for each method
Proposed conceptual approach • Implementation 20

1 The pure BU-LRIC approach only


includes incremental costs
 The model will use a pure Voice termination
BU-LRIC approach based on the incremental cost
EC Recommendation:
 only the cost ‘that is avoided when
not offering voice termination’ is All other traffic and
subscriber-driven
allocated to this service
network costs
 wholesale termination is treated as
the ‘last’ service in the network
 non traffic-related costs, such as Network share of
subscriber costs, are not allocated business overheads
 network common costs and
business overheads are not
We will use pure LIRC
allocated to the end result increments in our model

Ref: 15235-142
Proposed conceptual approach • Implementation 21
16
2 There are several approaches to
depreciation in a cost model
Straight-line historical cost accounting Straight-line current cost accounting
300 300

250 250
Annual cost

Annual cost
200 Operating expenditures 200 Operating expenditures

Depreciation (HCA) Depreciation (CCA)


150 150
Cost of capital employed Cost of capital employed
100 (HCA) 100 (CCA)

50 50

0 0
year 0 year 1 year 2 year 3 year 4 year 5 year 0 year 1 year 2 year 3 year 4 year 5

Tilted annuities Economic depreciation Recommended


600
350 by the EC
300 500

Annual cost
250 400
Annual cost

200 Operating expenditures Economic cost recovery


300
Annuity charge (tilted)
150
200
100
100
50
0
0 year 0 year 1 year 2 year 3 year 4 year 5
year 0 year 1 year 2 year 3 year 4 year 5

In mobile networks, traffic volumes have grown significantly in recent years


and mobile broadband volumes are growing strongly.
Ref: 15235-142
Therefore, economic depreciation is our proposed method
Proposed conceptual approach • Implementation 22
18 19 20
3 Our WACC will work in real,
pre-tax terms
 We will follow standard best
 The model will express costs
practice for the WACC calculation and revenues in real (inflation
 A single WACC will be used in adjusted) terms, using the
the model corresponding ‘real terms’
WACC
 We will review the CMT list of  The model will apply a ‘pre-tax’
‘pure play mobile’ operators, such WACC to pre-tax cashflows
as MTS, Mobistar, Telenor,
 The ‘pre-tax’ WACC will be
Teliasonera and Vodafone Group
determined using an analogous
 The model will work in real, methodology to that already set
pre-tax terms out by ANACOM for Portugal
Telecom, adjusting its WACC to
reflect the change from nominal
to real terms

Ref: 15235-142
23

Ref: 15235-142
24

Graham Johnson
Graham.Johnson@analysysmason.com

Ian Streule
Ian.Streule@analysysmason.com

Ignacio Gómez Vinagre


Ignacio.Gomez@analysysmason.com

Guillermo Fernández Castellanos


Guillermo.Fernandez@analysysmason.com

Analysys Mason Limited España


José Abascal 44 4°
28003 Madrid, Spain
Tel: +34 91 399 5016
Fax: +34 91 451 8071
www.analysysmason.com Ref: 15235-142

Das könnte Ihnen auch gefallen