Balancing the Base Station Bottom Line

As wireless operators seek to maximise their bottom line, the decision of
how and when to invest more capex in order to minimise opex becomes a delicate
balancing act

There is no question that modern
society has developed a taste for communications mobility: mobile telephone,
mobile Internet, mobile television . . . the list keeps growing. Also growing is
the volume of infrastructure required to support such services-and the
associated costs of deployment. Whether the focus is second or third-generation
(3G) cell-based wireless systems, operators are currently spending millions to
optimise coverage, capacity, and quality of service or functionality of their
networks. In most cases, this means adding more base stations.

The sheer number of
base stations required to support cellular systems demands huge up-front capital
expenditure (capex) on the part of network operators. A seemingly minor price
fluctuation, magnified by the total number of base stations (hundreds, even
thousands), is in reality highly significant. It is not surprising, therefore,
that operators are increasingly hard-nosed when it comes to infrastructure
purchase. With the rise of the 'e-auction', where suppliers are invited to
post their best prices online, many operators are unashamedly focusing on
bottom-line cost rather than potential performance variables.

However, while
operators may be reluctant to compromise cost for higher performance, they are
not so blasé about ongoing operational expenditure (opex). It has been
speculated that the lifetime opex of a base station can reach up to five times
the initial capex, and as such is a key factor in a commercial network's
profitability.

Yet, as operators seek
methods of opex reduction, they are confronted by its inextricable link to capex
and the need to determine the optimum balance between them. How exactly is capex
related to opex? When is it justified to sacrifice one for the sake of the
other? The variability in base station scenario is enormous-depending on the
size, location and configuration of base station, the range of services offered,
and the impact of emerging complementary technologies. Ultimately, the trade-off
equation is unique for each individual network.

Site Negotiation Headaches

According to Davide Momich, radio infrastructure engineer with global
wireless operator, Orange, an increasingly significant contributor to capex-added
to equipment purchase and civil works-is site acquisition. As one of the
operators at the forefront of European universal mobile telecommunication system
(UMTS) deployment, Orange is currently focused on the first phase of network
roll-out-and that means expanding coverage.

“We're not so
focused on opex right now. That will come as UMTS network traffic increases,”
says Momich. “For us a major challenge at the moment is streamlining site
acquisition. In dense urban environments, particularly where there are
historical buildings, it's very difficult. Much less than half our site
negotiations are successful-and we have to include all the time and expense of
each failed negotiation in the overall capex.”

The essential factor
is the visual impact of the antenna system installation, Momich says. For a
successful new site negotiation, the solution must be low profile and
environment friendly. Where a prospective UMTS site is already in use for
Orange's dual-band 900/1800-MHz global system for mobile communications (GSM)
network, the negotiation is usually easier, since a multi-band antenna can be
introduced to maintain the number of antennas. However, as existing leases
become due for renegotiation, many site owners are demanding a rationalisation
of site infrastructure; in some cases, they are even refusing to renew
contracts.

To ease such site
negotiation headaches, low visual impact antenna systems are in much demand.
“We're looking for integrated solutions, where all tower-top components are
encased within the radome of the antenna,” says Momich. “This includes
tower-mount amplifiers (TMA), remote tilt control systems, multiplexers-whatever
is necessary to meet the requirements of the site owner. We're also looking at
tri-sector antenna clusters.”

Environment friendly
antenna installations can also help to reduce ongoing site lease costs-one of
the key contributing factors to opex-says Patrick Nobileau, vice president,
Base Station Antenna Systems with wireless technology group, Radio Frequency
Systems (RFS). This is where multi-band antennas can be an advantage. “The
weight, size, and shape of a dual-band antenna is very close to a single-band
antenna,” Nobileau says. “There is also the option to use a triple-band
antenna, supporting 900, 1800, and 2100-MHz services, for very important sites
being migrated to UMTS.”

In addition,
installations incorporating integrated components such as TMAs offer the
advantage of having been assembled in a controlled, clean environment. “You
need jumper cables and connectors between the antenna and the TMA,” says
Nobileau. “Assembling these on a rooftop at the whim of the weather is
obviously not the ideal situation. Pre-assembly ensures the entire system is
interconnected in the best possible environment for superior reliability and
speed of installation.”

Opex and Network
Optimization

In addition to equipment maintenance and site lease costs, the main
contributors to base station opex are utilities (mainly electricity), backhaul
options (such as line rentals), and the varied costs associated with network
optimisation. This last, says Momich, is destined to have huge impact for 3G
networks as traffic increases over the next year or so.

“We are looking
closely at network optimisation techniques-remote antenna tilt control options
are as a matter of fact ready; control over the antenna's horizontal pattern
shall follow next,” Momich says. It is widely acknowledged that 3G services
such as real-time video transmission can lead to dramatic and unpredictable cell
traffic-loadings, resulting in the need for dynamic cell adjustment. “Besides
dramatically increasing optimisation process flexibility, remote antenna tilt
control eliminates the need for a 'cherry picker' or tower climber to reset
the tilt. Such manual tilt adjustments can get quite expensive, so remote tilt
offers significant ongoing reductions in opex.”

In fact, says Nobileau,
the capex associated with installing remote tilt control technology can be
offset by a single manual adjustment-assuming typical costs for the hire of a
hydraulic lift and two-person team. Furthermore, loss of revenue due to a site
being down during a manual tilt operation needs to be considered. Since it has
been speculated that some 3G sites might require regular tilting-even on a
daily basis-the opex savings associated with remote tilt control are
potentially enormous.

Nobileau suggests that high-gain antennas are a possible alternative

Choice of antenna also
plays a role in ease of network optimisation and associated opex. Not only is
tight antenna pattern control important to minimise interference, but also the
impact of excessive cell sector overlap is predicted to be detrimental to the
efficiency-and capacity-of UMTS networks.

“We are still
waiting for the results of traffic analysis, but it looks as though a 65-degree
horizontal beam-width will lead to excessive UMTS sector overlapping in dense
urban environments,” Momich says. “This is because handsets located within
the cell's overlapping region are in a perpetual state of handover, demanding
resources from both sectors simultaneously. To combat this, we're considering
reducing the azimuth down to 55 degrees, maybe even 45 degrees, to optimise both
coverage and capacity.”

Momich also says that
increased antenna downtilt will be required as cell dimensions reduce. “Right
now, in dense urban areas the average radius for a cell is about 200 to 250
metres, where downtilt is typically at about eight degrees. We're right now
looking for antennas with downtilt range from four to 14 degrees,” he says.

Gaining Ground

Strategies to expand cell coverage-and thereby minimise the number of
base stations required to service a given area--are of interest to operators as
a means of capex reduction. However, simply increasing the base station output
power to compensate is not necessarily beneficial to opex, since power
consumption escalates dramatically on the basis of power amplifier efficiency
and associated air conditioning of the housing.

Nobileau suggests that
high-gain antennas are a possible alternative. Without any increase in base
station output power, adopting an antenna with 21-dBi gain-as opposed to 17
dBi-can result in a 30 % reduction in the number of required base stations to
achieve a specific coverage. “Alternatively, high-gain antennas could be
installed at a lower altitude,” he says. “This offers capex savings
associated with the tower structure and also the length of the cable feeding the
antenna.”

While Momich applauds
the benefits of high-gain antennas in principle, he explains that the limiting
factor in their application is the physical dimension of the antenna. Even at
UMTS frequencies (2.1 GHz), high-gain (21-dBi) antennas are around two metres in
length-visually far more prominent than the 1.4-metre antennas otherwise used.

“The important thing
for deploying high-gain antennas will be the integration of all the other
components within the two-metre radome in order to minimise the visual
impact,” Momich says. “We shall consider an integrated cluster solution that
has room inside the structure for a high-gain antenna. We would then be able to
use it, which would be good from a technical point of view.”

Balancing Act

Clearly the capex opex-balancing act is complex and dependent on many
parameters. Moreover, the decision of when to increase capex in order to improve
opex is one that all operators approach differently. For example, while some
operators acknowledge the merit of remote antenna control systems and have
developed a deployment strategy, others have stated they will most likely deploy
them only at sites where access is particularly difficult or costly.

Nobileau cites another
interesting capex/opex equation as that encountered by a major US operator
deploying a UMTS 1900-MHz network as an overlay to its existing dual-band
850-MHz and 1900-MHz network. Here, the target is to provide UMTS coverage
through utilising exactly the same base station sites as the existing
network-including extensive feeder cable sharing-thereby obviating the need
to deploy new UMTS sites. This undeniable capex saving is offset by the need for
a complex and unique base station architecture-incorporating diplexers, TMAs,
dual-band antennas, RF filters-in order to ensure that the resulting services
provide comparable coverage.

Despite the current
focus on UMTS network coverage expansion, Momich and his team also have their
sights set on the future. “Right now we're facing the matter of coverage,
but in another year we'll face increasing traffic for new services and the
'killer application' for UMTS,” he says. “It's more than network
optimisation; there's also a measure of ongoing reassessment and
redesign-including the provision of indoor coverage for premises such as
shopping centres and office buildings.”

Dynamic and Organic

The relationship between base station capex and opex-whether considered
a 'delicate balance', 'complex equation', or 'sweet spot'-is
unquestionably dynamic. Cellular networks themselves have been described as
organic, so it is perhaps not surprising that the financial bottom line is as
difficult to pin down.

Certainly operators
are confronted by the need for ongoing base station deployment-whether to
improve coverage or capacity-while maintaining good quality of service under
network load. Yet although keeping a close eye on capex is necessary to ensure
the resources are present for infrastructure deployment, the lifecycle costs of
running a base station are forcing operators to focus more closely on opex. At
the end of the day, operators will make their own decisions as to when increased
capex is merited and when it is not. And each time it will likely be judged on a
case-by-case basis.

Jorg Springer, chief marketing officer,
Radio Frequency Systems

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