Rauno Huoviala

Rauno Huoviala

Director, Head of Service and Product Development

User and Cost Centric Capacity Management – Forgotten Opportunity?

Reading the industry articles and talking with operators around the world, I have identified a couple of topics repeating themselves when it comes to operator headaches with mobile data: Customer centric quality control and increasing investments due to the data capacity crunch.

The latter one has been a trend for some years now, but still we have not seen the end of it. Even if in some developed markets the dongle and modem data growth is saturating, the smart phone boom still keeps the overall data growth curves in a steep angle. For sure the HSPA network capacity can be improved with increasing number of solutions and features such as additional carriers, Dual-Cell, baseband upgrades, peak rate features etc. Network vendors keep pushing those everywhere in the operator’s network, but without thorough feasibility analysis they cost the operator a lot of money. It seems to me that the speed of the data growth has forced some operators to do fast decisions on capacity expansion investments even without clear indication on the profitability of all the expansions. In this trouble mode there is simply no time for the operator to thoroughly plan what to invest and where, but they rather deploy high level capacity strategies with some “blanket” capacity configuration (often over dimensioned) to keep the customers happy.

This is the dream situation for network vendors, exploiting the uncontrollable market change by selling variety of different solutions to the same problem, with a high price. Even the operators who do practice more precise capacity planning still have to rely on planning guidelines with quite old fashioned and rigid network centric thresholds. Often these guidelines are defined by the network vendor. This bothers me a bit, as I have seen in many operator cases that this has led to low cost effectiveness of the capacity expansions. And this was one of the key headaches of the operators, supporting moderate MBB revenues with a high cost. Careful investment in incremental HSPA is becoming even more important now as the LTE era is looming. The operators run the risk of having to pay twice for the capacity of one MBB service: First as HSPA capacity expansion and then as a new LTE network. On the other hand, I don’t think the average network vendor would have anything against this.

What comes to the customer centric quality, it is a bit fresher awakening from the operators partly revealed by the effects of the capacity crunch. Operators are adopting a mind-set of focusing on the actual customer experience rather than only looking after the network functioning. A healthy network, in terms of the traditional network KPIs, does not necessarily mean a happy customer. This brings me back to the capacity planning. Should operators plan the capacity from the end user perspective rather than from the network functioning perspective? Don’t get me wrong, the network functioning and KPIs of course has to be secured, but if only that is followed in the capacity planning, it will result in insufficient and heterogeneous end customer experience. Reason for this is that the network capacity KPIs do not exactly correlate with the end user QoS. This is another reason why I don’t like the old-fashioned capacity planning guidelines. After all, in my mind the term capacity should mean the same as the user perceived quality. Or is there an operator who invests to capacity just for the fun of getting bits in the air? No. At the end they are looking after happier customers.

Because of these two often forgotten aspects I think there could be much to improve in the way operators plan and expand the data capacity. My question is: As the mobile data capacity is becoming a similar competitive asset for operators as the service coverage, shouldn’t there be similar emphasis on capacity management?

Operators are not to blame though. In this sudden change on traffic and technologies there has not been enough time to develop sufficient capacity planning tools and processes, unlike with radio coverage planning, where the operators have had years to develop the competence and very  sophisticated tools. Also, the network vendors have done their best to keep it that way, by making the capacity licensing very complex and not developing capacity planning tools that would allow operators to proactively minimise their future investments.

What can then be done? In my mind operators should update the guidelines for capacity planning and put more emphasis on it and focus on the right KPIs – namely the customer and the cost. We at Omnitele have studied this issue for a couple of years now, and we have analysed new models for the capacity planning which leave the network centric thresholds in the back seat and focus on end user QoS and capacity cost effectiveness. The results show that just by doing a bit more analytical capacity planning in the network operators can save 30-60% of their incremental capacity Capex, and still reach the end user QoS targets consistently in the network. This saving may well be the key differentiator for an operator to turn the mobile broadband profitable.