The South African telecoms market is being opened up to a significant number of
new entrants. The Independent Communications Authority (ICASA) has awarded a nationwide
licence for a converged multimedia and telecoms operator, which will require a next-generation,
carrier-grade network with system architectures able to offer current and future
IP-based multimedia services.
Ericsson and Marconi Communications responded to a request from this newly licensed
carriers’ carrier for business and marketing strategic support, integrated with
end-to-end network solutions. The Ericsson-Marconi consortium developed a business
strategy, created complex network designs incorporating both companies’ diverse
equipment portfolios, and used STEM as the modelling tool of choice to develop appropriate
business and investment plans.
Developing strategies for a multimedia services operator
The consortium developed a three-phase market-entry strategy designed to facilitate
incremental growth and investment. This three-phase approach starts with a carriers’
carrier network business, moves on to multimedia service provision, and ends with
the roll-out of an appropriate access network necessary to operate as a retail provider
targeting chosen end-customer market segments.
This strategy allows for the deployment of a cost-effective network with quick revenue
growth on minimum investment, with the reduced operational costs associated with
combining conventional voice and data services.
STEM was used to evaluate marketing strategies in terms of their associated revenues
and network costs. Various scenarios were modelled in order to support the development
of appropriate network solutions. The financial effects of capacity scaling were
evaluated for differing scenarios of user take-up. This was crucial in quantifying
the effects of market forces in the newly-liberated South African communications
market.
Financial modelling of an end-to-end network
The network was designed as an end-to-end deployment of Marconi and Ericsson products,
and the modelling therefore needed to incorporate both the applications layer and
the detailed transmission, routeing and access technologies:
- core network transmission
- core network switching and routeing
- core network intelligent control
- network management
- OSS BSS
- different broadband access network technologies, both wireline and wireless
- customer premises equipment.
The STEM model mapped different market segments and usage patterns onto network
resource requirements. The related traffic engineering processes were then used
to dimension the infrastructure required at the access interfaces, switch-routeing
nodes, transport network and cross-connects. A number of scenarios were used to
compare the impact of different core network transport options (leased capacity,
dark-fibre leasing, etc.) on the network costs and consequential financial results.
Decision-making according to financial results
Proposed network solutions for a complete, converged multimedia and telecoms business
were dimensioned according to various business strategies. These strategic options
were tested against varying market forecasts and calibrated with financial outputs
from STEM. Risk analysis was a key determinant for evaluating investment decisions.
The analysis identified the importance of being able to implement highly scalable
technology solutions, directly linked to comprehensive financial proposals based
on real network costs.
The consortium was able to design best-fit technology solutions based on a thorough
consideration of business needs and market conditions. In today's competitive telecoms
markets, business-driven decision-making through comprehensive and dynamic financial
modelling is key to the generation and maintenance of an operator's differential
advantage.
Ericsson provides mobile and
broadband Internet communications solutions in more than 140 countries around the
world.
Marconi Communications
provides broadband next-generation networks specifically designed for a converged
service delivery environment.