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Network Planning and Optimization - Basis for the "Digital Telco"​

I thought to share my - slightly extended - foreword to Ajay Mishra's excellent "Fundamentals of Network Planning and Optimisation" which has just been published in second edition. In doing so, I want to advertise the importance of mobile network technology fundamentals as a basis for what I call the "Digital Telco".

Mobile telecommunication has been - and most likely will continue to be for the foreseeable time - a key enabler for economic growth and innovation. As a trillion-dollar industry, and contributing 4.5% to the global GDP, in 2017 for the first time both the number of SIM connections as well as (above and beyond those) the number of IoT connections have each surpassed the number of humans on the planet*. Now 2 out of 3 of the world’s population is mobile connected, more than half with a smartphone.

However, industry revenues are stagnating, even declining in some markets. This stands in stark contrast with an expected 42% CAGR increase of mobile traffic in the next five years**, 4G now being mainstream and 5G with imminent commercial launches, all of which drive CAPEX intensities above 15% of revenue. Competitive pressure has not only risen amongst the established players, but a new breed of disruptive “Digital Telcos” has emerged with dramatically lower production cost. Reliance Jio in India is a reference example, serving 100 million customers and gaining mobile broadband market leadership in less than half a year post market launch, marking about 250 million customers at the second anniversary. In addition, we also witness a value shift across industries. For example, the economic-profit share of Apple, Google, and Microsoft alone, across the global tech, media, and telecom sectors, has doubled in 4 years to 24%***.

In this market environment, operators have no choice but all becoming “Digital Telcos”. McKinsey estimates that a full digital transformation can double the cash flow margin within five years. Many operators had experimented with off-core OTT business models, but focus is largely back to the roots - network and service customer experience, security & trust, interoperability and efficiency. Customers rightfully expect a consistent outdoor and indoor coverage with high bandwidth, low latency and an enticing voice and video experience. Network efficiencies are gained from full migration to IP and virtualization, automation, employing open source, network sharing, re-farming and ultimately retirement of legacy networks.

The Digital Telco is the ideal foundation of 5G use cases - enhanced mobile broadband, IoT, and mission-critical applications. These use cases will require network performance to increase 10-fold over current levels across all network parameters, as measured by latency, throughput, reliability, scale, and power management. While global smartphone shipments have stagnated in 2017 for the first time, at below 1.5 billion units, the number of IoT connections is expected to grow to 25 billion by 2025*. Digital Telco networks will be an integral part of pervasive AI - artificial intelligence in every single end point, be it the smartphone, speaker, camera, drone or car. In fact, digital networks themselves become part of the AI cloud, as safe harbor of customer data and trusted source of insights and identity. We will see a convergence of the cloud and the edge, with seamless interworking of training complex AI models in the cloud and real-time operation on the edge. As densification progresses and with the proliferation of small cells and mesh networks, the underlying fiber infrastructure will further gain importance, as will smart spectrum management, carrier aggregation and spatial diversity (MIMO).

A solid understanding of the fundamentals of cellular network planning and optimization is a prerequisite to shape the path towards the Digital Telco, which is centered around customer experience, efficiency for lowest production cost, interoperability and scalability. Network planning teams are a central element of the digital transformation, and thus require an end to end understanding of all employed technologies and the engineering processes itself, across the radio network and spectrum, transmission and core networks.

Ajay Ranjan Mishra, a network planning practitioner who has spent his career in this discipline and understands fully the needs of the planning teams, has used his practical insight to bring together, under one cover, the end to end view of network planning across all technologies. The book is designed for network planners who are starting their careers in the field and for others who desire an end-to-end understanding. It emphasizes the planning process itself and develops the concepts that planners need to get good results. The book gives new planners a flying start, experienced planners a broader view, and even beyond engineers anyone with a genuine interest in one of the most important assets of a Digital Telco – the network – a solid basis to help shape the future of their company.

Dr. Rainer Deutschmann; Group Chief Operating Officer Dialog Axiata PLC; former Chief Product & Innovation Officer Reliance Jio Infocomm Ltd.

Sources: * The Mobile Economy 2018, GSM Association; ** Ericsson Mobility Report, November 2017; *** Hello, mobile operators? This is your age of disruption calling, McKinsey October 2017



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