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Economics and Methods to Provide Optimal Access Network in Broadband Access Network

Economics and Methods to Provide Optimal Access Network in Broadband Access Network. Introduction. 1. 2. KT ’ s Broadband Access Network. 3. Optimal Equipment Provision Criteria. Modeling and Economics. 4. Conclusion. 5. What is Broadband ?. Narrowband

Albert_Lan
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Economics and Methods to Provide Optimal Access Network in Broadband Access Network

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  1. Economics and Methods to Provide Optimal Access Network in Broadband Access Network

  2. Introduction 1 2 KT’s Broadband Access Network 3 Optimal Equipment Provision Criteria Modeling and Economics 4 Conclusion 5

  3. What is Broadband? • Narrowband • The highest speed modem used with a traditional telephone line, known as a 56K modem, offers a maximum data transmission rate of about 45,000 bits per second (bps). • For example, using a 56K modem connection to download a 10-minute video or a large software file can be a lengthy and frustrating exercise. • Broadband • Broadband or high-speed Internet access is provided by a series of technologies that give users the ability to send and receive data at volumes and speeds far greater than current Internet access over traditional telephone lines. In addition to offering speed, broadband access provides a continuous, “always on” connection (no need to dial-up) and a “two-way” capability, that is, the ability to both receive (download) and transmit (upload) data at high speeds.

  4. Access Networks • Access networks is part of a communications network which connects subscribers to their immediate service provider. • Access networks provide broadband services over the last mile to homes and small offices • We can classified access networks into two categories depending on the infrastructure • Wirelineinfrastructure • CATV networks • xDSL technologies - Existing copper technologies (ADSL,VDSL,XDSL etc.) • Fiber To the Home (FTTH) or to the Building (FTTB), to the Pole(FTTP) • Wireless infrastructure • Satellite • WiFi and WiMAX, Wibro • 3G WCDMA and HSDPA • ZigBee • Bluetooth

  5. Broadband Technologies Category • CMTS : Cable Model Termination System • ETTH : Ethernet to the Home • OLT : Optical Line Termination • ONU : Optical Network Unit • ONT : Optical Network Termination • TDM : Time Division Multiplexing • CWDM : Coarse Wavelength Division Multiplexing • DOCSIS : Data Over Cable Service Interface Specifications Access Network FTTC (Fiber to the Curb) FTTH (Fiber to the Home) xDSL (Twist-pair) HFC (Hybrid Fiber Coaxial) LAN (UTP Cable) Home Run (Point-to-Point) AON (Active Optical Network) PON (Passive Optical Network) DOCSIS 2.0 40M A/B-PON ADSL 8M Fast Ethernet 100M KT : Ntopia Directly connect between OLT and ONU(ONT) 100M Powered switch node UTP connection Fiber signal amplification Speed low High Cost E-PON DOCSIS 2.0b 200M TDM VDSL1 50M G-PON ETTH 200M VDSL2 100M DWDM-PON WDM DOCSIS 3.0 200M CWDM-PON

  6. 1 Introduction KT’s Broadband Access Network 2 Optimal Equipment Provision Criteria 3 Modeling and Economics 4 Conclusion 5

  7. OLT OLT OLT ONT ONT KT Broadband Network BackBone Network Access Network Home Network VDSLaggregator S/W Copper MODEM BBx IP-VDSL Copper Fiber 1000BFX VDSLaggregator S/W GES FES 24 UTP 100BFX Ntopia 1000BFX Fiber APT 통신실 동단자함 Metro-core S/W (RS38000) Ntopia S/W 1 24 UTP 32λ/1core 100Mbps FTTP/FTTC 32 Fiber 100Mbps/λ FNU(S/W) RN(AWG) UTP 1 32λ/1core FTTH (WDM-PON) 100Mbps 32 Fiber 100Mbps/λ RN(AWG) Metro-core S/W (RS38000) Ntopia S/W UTP 1 32 Fiber FTTH (E-PON) 1.25Gbps/1Core RN(SPLITTER)

  8. The Number of Subscribers and Equipments at KT • 85% of all subscribers at KT use Copper, especially 95% at single housing • 68.5% of all subscribers at KT use 20M below equipments • In case of single housing , 20M below equipments occupied about 84% • In case of APT complexes, 50M above equipments provided about 50% )2007 year

  9. The Status of Equipment Provision at KT • Current Provision Basis • High Density Housing Area (Apartment) • UTP possible : Ntopia • UTP not possible : 100M VDSL • Low Density Housing Area (Single Housing) • Densely populated area : BBx-50M-VDSL / FTTH • Sparsely populated area : BBx-50M-VDSL / FTTH-P

  10. 1 Introduction KT’s Broadband Access Network 2 Quality and Optimal Provision Criteria 3 Modeling and Economics 4 Conclusion 5

  11. Transmission Rate depending ondistance • VDSL has distance problem • 50M VDSL : 500M longer, transmission rate attenuation • 100M VDSL : 300M longer, transmission rate attenuation • FTTH provides constant transmission rate regardless of distance Transmission rate according to distance * VDSL 50/100M downstream basis

  12. Bandwidth according to Subscriber capacity rate • FTTH provides the constant bandwidth • WDM-PON provides the constant bandwidth regardless of subscriber capacity rate(for using wavelength) • E-PON, Ntopia fluctuate according to subscriber capacity rate • VDSL E-PON, Ntopia fluctuate according to subscriber capacity rate * VDSL 50/100M downstream basis

  13. Fault-rate and Cause • Ntopia solution lowest fault rate • No equipment in the customer’s premises • VDSL(50M/100M) solution highest fault rate • Many connection node from backbone to access including modem or ONT • Copper line has copper deterioration • FTTH has fault rate lower than VDSL, but higher than Ntopia • Because ONT fault in customer premises [number of fault/1000 users]

  14. Network Requirement to provide TPS • When TPS activated, Over 40+œ Mbps is required • When TPS started, 20+œ Mbps is required for servicing HDTV 1 channel, SDTV 1channel • When TPS activated, 40+ œ Mbps is required to provide 3 channels HDTV simultaneously

  15. Operation Quality Comparison Good Bad

  16. Optimal Access Network Topology (housing type) [Densely populated housing] Central office (backbone) RN Real-FTTH KORNET (Special Apt.) ONT OLT IP-Premimum [Hybrid FTTH] [Current Ntopia] RS-38K PON + Ntopia UTP (Remodeling Apt.) FES L3 UTP PON + VDSL2 Copper Ntopia(FES) Ntopia-SW (Remodeling impossible) Modem VDSL2 L3 + VDSL2 Copper (Remodeling impossible) VDSL2 Modem VDSL2 [Non densely populated housing] (Inside 900M ) Copper Copper Modem Model In case of reusable BBx VDSL2 [BBx of outside CO] [Area inside CO] Real-FTTH (Suburban housing) RN ONT OLT PON + Ntopia UTP (Remodeling impossible) FES [Hybrid FTTH]

  17. 4 Analysis of investment Selection of wiring Size • Economical analysis as investment and maintenance costs • Choosing the number of line as subscriber’s size and density 3 Selection of network solution 2 • Selection of access solution as housing type • Re-selection as economics and competitors Selection of investment priority Area 1 • Which area is firstly provided • Choosing Priority item • Choosing weight How to invest and Provide access network equipment

  18. Priority Selection for providing access technology • Each items is calculated with weight • The item of comparing bandwidth with competitor and KT is the highest • In case the total sum is many , priority is highest • The area of densely populated, apartment complex, equipment is inferior to competitor • Priority Diagnosis Table

  19. Priority Selection for providing access technology Item of provision technology with competitor and KT

  20. 多 多 多 多 多 多 多 多 多 多 多 多 多 多 多 多 少 少 少 少 少 少 少 少 少 少 少 少 少 少 少 少 1 1 1 1 1 1 1 1 1 1 1 1 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 Priority Selection for providing access technology (summary) KT Market share KT 점유률 50% 이하 KT 50% Below KT 50% above Number of people Low density High density Low density High density competitor/KT Inferior Superior Superior Inferior Inferior Inferior 열세 Superior Superior price VOC rate APT ranking Rural ranking • 8p~10p : 1 ranking • 5p~8p : 2 ranking • 5p below: 3 ranking 3 Ranking 2 Ranking 1 Ranking • The area of sparsely populated and equipment is superior to competitor • The area of KT’s market share is high and equipment is superior to competitor • The area of sparsely populated and equipment is inferior to competitor • The area of densely populated and KT’s market share is high • The area of densely populated and equipment is inferior to competitor

  21. 1 Introduction KT’s Broadband Access Network 2 Optimal Equipment Provision Criteria 3 Modeling and Economics 4 Conclusion 5

  22. Analysis of Capital Efficiency (wiring cost) • Densely populated housing • Hybrid solution is 11% more than Ntopia • Hybrid solutions have provided good quality and bandwidth than Ntopia • Sparsely populated housing • FTTH solution is 8% more than BBx-VDSL • In the future, considering trenching costs, it is desirable to capitalize to competitive FTTH in one step, without undergoing other solutions sparsely populated housing Densely populated housing Wiring cost per sub. Wiring cost per sub. 8% 45% 32% 11% FTTH (special level) BBx-VDSL FTTH Ntopia Hybrid VDSL (No using BBx)

  23. Modeling to analyze economics • We define generic sets and objective functions • Optimal functions to maximize “income cost of revenues – capital expense “ • Revenue costs * {Yt=1 + } , where t= year , z= target year, Y =the number of subscribers, = rate of increasing subscribers Service usage cost of i technology per subscriber

  24. Modeling to analyze economics • Capital costs • A set of parameters Modem cost Service opening cost Line count at t year Wiring cost Equipment cost , where i=Access technology, j= Housing type

  25. Modeling to analyze economics • Maintenance Costs • Rental costs • Electricity costs • AS(After Service) costs Average ground rental cost per BBx * BBx count Electricity cost (monthly) per BBx * BBx count Fault rate * AS(After Service) cost for subscriber , where H = Labor cost per subscriber p= Subscriber line count at t year

  26. Modeling to analyze economics • Optimal formula to minimize the capital costs and maximize the revenues Maximize * {Yt=1 + } - - ] } [ { +

  27. Wiring Cost per one Subscriber (densely poluplated area) ($1 = W 1,000)

  28. Wiring Cost per one Subscriber (sparsely poluplated area) ($1 = W 1,000)

  29. Modeling Results • NPV(Net Present Value) • > 0 : revenue occurs • < 0 : revenue does not occur • Assumption • 10 thousand lines are supplied at the first year. • All equipments is newly deployed • Comparing for 5 years • Discount ratio = 9.81 %

  30. Modeling Results(Densely populated housing) • Capital expense and revenue result during Y+5 Year in densely populated housing • Ntopia solution is the most economical (at approximately Y+3) • FTTH solution is less economical than Notpia, Hybrid solutions Densely populated housing Ntopia Hybrid Ntopia NPV FTTH Year Y Y+2 Y+3 Y+4 Y+5 Y+1

  31. Modeling Results(sparsely populated housing) • Capital expense and revenue result during Y+5 Year in sparsely populated housing • VDSL solution inside the central office (CO) without BBx is the most economical (at approximately Y+3) • VDSL solution using BBx is less economical than inside CO VDSL , Hybrid solutions sparsely populated housing NPV Inside CO VDSL Hybrid VDSL BBX-VDSL Year Y Y+2 Y+3 Y+4 Y+5 Y+1

  32. Conclusions • Reviews economics and efficiencies comparing three different access technologies such as VDSL2, passive FTTH, fiber LAN of Ntopia • FTTH appear to be the best candidate for the next-generation access network - Subscribers want to be provided high bandwidth - Broadband market shifts from ADSL to FTTH • In the eyes of KT (network provider), it is impossible to convert all access networks at one time to an optical for the cost problem. • We propose middle stage, Hybrid access network such as FTTH PON+Ntopia and FTTH PON+VDSL providing economical solution

  33. Thank You ! jkchun00@naver.com

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