In the past months I had been very busy, too busy that I ignored writing anything on this blog. Now I'm back! Still very very busy but have more exciting things to share.
The past months I have been helping Seanet (www.seanet.se), a maritime mobile operator, double its fleet sea-going vessels where its services are provided. And I learned a few important lessons along the way. Most especially in the improvement of the quality of life for those who works at sea.
I grew up in a country with 7107 distinct and unique islands, so sailing from one island to another is as natural to me as speaking multiple languages. In the old days (if anyone can remember) most people who work in the shipping industry had to endure long days away from their friends and love ones. It is still true today since no one has yet managed to design and build ships that can travel at the speed of sound. However with the advancement of technology this has changed dramatically.
Now on almost every ships (both passenger and merchant) has access to satellite phones, and recently in most passenger ships both passengers and crew can use their mobile phones while at sea. I have been in the mobile communications industry long enough to appreciate the changes that mobile telephony has brought to society. Today we can reach almost anyone at anytime and anywhere. Be it in the middle of the ocean or in the sky (yes your mobile phone also works in some airlines while flying).
For a ship's crew this is a wonderful advancement since they can now have almost the same working experience and as it is on land. The factor of homesickness is reduced and they can get in touch with friends and family everyday. Such improvement in the quality of life while working at sea solves the fundamental problems most sailors experience. Furthermore with the growing trends in m-commerce they would no longer need to be on land to make financial transactions, making it convenient to manage their finances while enjoying the life on board.
Now then the next step is how we bring a reliable and fast mobile video application to hose who works and leaves on board sea-going vessels.
Friday, October 24, 2008
Thursday, May 29, 2008
OPEX reduction in Mobile Networks
In today's economic environment most if not all companies search for ways to increase revenue and decrease cost. In these times where spending is not at its highest decrease in cost is the most desirable.
In mobile networks reduction in OPEX is the main aim of every financial controller. Achieving this would mean that the company can have better profit margins and return of investment. There are several ways of reducing OPEX ranging from the easy excuse of reducing staff to the most complex solution of consolidating operations and maintenance. Every strategy to reduce OPEX has its pros and cons, however there a few that are very effective with no downside as follows:
- Site lease pre-payments
- Effective asset monitoring
- Multi-dimensional planning
Site Lease pre-payments
Site leases are the second highest cost for any network operator next to payroll. Most companies approach OPEX reduction by reducing payroll cost thus reducing the number of staff but this also reduces the company’s capabilities. Reducing site leases is the way forward especially if the reduction is substantial. However it is a fact that site leases don't reduce over time, they actually increase based on factors such as inflation, raising value of property, etc. The challenge is how do you reduce this cost?
The answer is simpler than you think it’s pre-payment of site leases. This new strategy is being pursued by equity firms such as RFS Capital of which received the only carrier sponsored site lease pre-payment today with 2 of the world's largest mobile operator. Site lease pre-payment can reduce the cost of leasing sites from 20% to 40% considering industry standard site lease escalators. OPEX reduction is achieved by paying the future lease today which is basically paying the net present value of a future rent. In doing so the rent escalators are removed thus instant savings and the monthly rent are lowered as well.
Considering an average savings of 25% over all sites, take into account an operator with 10,000 sites of enters a lease pre-payment term. As an example the average site lease is 10,000€ per year. Now with 25% savings that amount to an OPEX savings of 25M€ year in and year out. Taking into account 25 year lifecycle of a cell site, the total savings is 625M€. That's a lot of money and with no cost to the operator; site lease pre-payment is the future of OPEX reduction.
Effective asset monitoring
Cell site is one of the most expensive physical assets of a mobile operator considering the CAPEX that goes in every site. In an average case 1 cell site have a CAPEX of around 50,000€. Effective asset monitoring actually starts during the building and installation phase. In a lot of cases around 5% of sites needs re-work and another 5% would need special maintenance due to poor implementation. If an operator have an effective asset monitoring platform such as ADaM (Amanzi Data Management) then it is possible to achieve around 10% savings in OPEX.
Considering a yearly roll-out of 1000 sites, the OPEX savings achieved is around 5M€ at the cost of the asset monitoring platform used. There are good open source platforms that can deliver this kind of savings which cost almost nothing. An example of such application can be found in http://adam.amanzitel.com this application shows what can be monitored.
Multi-dimensional planning
Good planning is always essential to the success of any operations. In a well planned mobile network the capacity is properly dimensioned to meet the needs of its users. Additionally the changing dynamics of a mobile network is kept in check by optimisation, this in some way makes network planning an easier task. Optimisation is of course a high OPEX cost but with good returns in terms of providing a very high quality of service thus lowering churn rate. It is more a strategy for revenue assurance than OPEX reduction, how big is its effect to the overall picture? Consider a network with 5 million subscribers having a monthly ARPU 50€ of which has a churn rate of 5%, now with an optimised network the churn rate can be reduced to 2.5%thus ensuring an annual revenue of 75 million Euros.
Furthermore an effective network planning can save 10% of sites in a roll-out. Although this savings is always offset by the actual requirements in capacity and rate of how the network grows. Consider that on a 1000 site roll-out the savings is 100 sites of which an average cost for a site is 100,000€ then that's a savings of 10million Euros.
The best multi-dimensional planning application should be able to consider both revenue assurance and roll-out savings, thus increasing its effectiveness.
In mobile networks reduction in OPEX is the main aim of every financial controller. Achieving this would mean that the company can have better profit margins and return of investment. There are several ways of reducing OPEX ranging from the easy excuse of reducing staff to the most complex solution of consolidating operations and maintenance. Every strategy to reduce OPEX has its pros and cons, however there a few that are very effective with no downside as follows:
- Site lease pre-payments
- Effective asset monitoring
- Multi-dimensional planning
Site Lease pre-payments
Site leases are the second highest cost for any network operator next to payroll. Most companies approach OPEX reduction by reducing payroll cost thus reducing the number of staff but this also reduces the company’s capabilities. Reducing site leases is the way forward especially if the reduction is substantial. However it is a fact that site leases don't reduce over time, they actually increase based on factors such as inflation, raising value of property, etc. The challenge is how do you reduce this cost?
The answer is simpler than you think it’s pre-payment of site leases. This new strategy is being pursued by equity firms such as RFS Capital of which received the only carrier sponsored site lease pre-payment today with 2 of the world's largest mobile operator. Site lease pre-payment can reduce the cost of leasing sites from 20% to 40% considering industry standard site lease escalators. OPEX reduction is achieved by paying the future lease today which is basically paying the net present value of a future rent. In doing so the rent escalators are removed thus instant savings and the monthly rent are lowered as well.
Considering an average savings of 25% over all sites, take into account an operator with 10,000 sites of enters a lease pre-payment term. As an example the average site lease is 10,000€ per year. Now with 25% savings that amount to an OPEX savings of 25M€ year in and year out. Taking into account 25 year lifecycle of a cell site, the total savings is 625M€. That's a lot of money and with no cost to the operator; site lease pre-payment is the future of OPEX reduction.
Effective asset monitoring
Cell site is one of the most expensive physical assets of a mobile operator considering the CAPEX that goes in every site. In an average case 1 cell site have a CAPEX of around 50,000€. Effective asset monitoring actually starts during the building and installation phase. In a lot of cases around 5% of sites needs re-work and another 5% would need special maintenance due to poor implementation. If an operator have an effective asset monitoring platform such as ADaM (Amanzi Data Management) then it is possible to achieve around 10% savings in OPEX.
Considering a yearly roll-out of 1000 sites, the OPEX savings achieved is around 5M€ at the cost of the asset monitoring platform used. There are good open source platforms that can deliver this kind of savings which cost almost nothing. An example of such application can be found in http://adam.amanzitel.com this application shows what can be monitored.
Multi-dimensional planning
Good planning is always essential to the success of any operations. In a well planned mobile network the capacity is properly dimensioned to meet the needs of its users. Additionally the changing dynamics of a mobile network is kept in check by optimisation, this in some way makes network planning an easier task. Optimisation is of course a high OPEX cost but with good returns in terms of providing a very high quality of service thus lowering churn rate. It is more a strategy for revenue assurance than OPEX reduction, how big is its effect to the overall picture? Consider a network with 5 million subscribers having a monthly ARPU 50€ of which has a churn rate of 5%, now with an optimised network the churn rate can be reduced to 2.5%thus ensuring an annual revenue of 75 million Euros.
Furthermore an effective network planning can save 10% of sites in a roll-out. Although this savings is always offset by the actual requirements in capacity and rate of how the network grows. Consider that on a 1000 site roll-out the savings is 100 sites of which an average cost for a site is 100,000€ then that's a savings of 10million Euros.
The best multi-dimensional planning application should be able to consider both revenue assurance and roll-out savings, thus increasing its effectiveness.
Saturday, May 3, 2008
Believe to Achieve - Learning a Child's Way
I have always thought that as adults there are good things we learn from children. Indeed there a lot of them some applies to our daily life some applies to the corporate environment, this week I observed something that applies to both.
My 6 year old daughter Kaja until this weekend was unable to go on a bicycle without the side wheels. Last Friday she said that she can do anything she believes that she can achieve. To prove her point she asked for the side wheels of her bike to be removed and she wanted to bike on two wheels. The request seems muted since she never has done it before and nobody did manage to get her to do it before.
After a few minutes of trying she actually succeeded in using he bike without the side wheels. Amazingly enough se claims she taught herself to bike because she believed that she can. Saturday morning she was awake very early demanding to be outside and cycling. She demonstrated how well she can bike after just learning to bike on her own yesterday. Another child from the neighbourhood came by to play with her and she convinced the other child that Kaja can teach her how to bike.
I heard the same phrase of believing to achieve what you wanted. So she went and starts teaching the other girl how to bike without side wheels but after a few minutes the other girl stopped and said it’s too difficult. Kaja simply went cycling around until the other girl was convinced to give it another try. Kaja showed her how to do bike correctly and gave strict instructions. After a few minutes of trying she was off cycling on her own. The other girl was so proud that she went showing her parents and grandparents what she just learned and said "Kaja taught me how to bike and only Kaja".
Considering that small children believes they can achieve something they want as long as they believe they can, it applies to everyone of us no matter how difficult or impossible something is we can achieve it if we believe that we can.
My 6 year old daughter Kaja until this weekend was unable to go on a bicycle without the side wheels. Last Friday she said that she can do anything she believes that she can achieve. To prove her point she asked for the side wheels of her bike to be removed and she wanted to bike on two wheels. The request seems muted since she never has done it before and nobody did manage to get her to do it before.
After a few minutes of trying she actually succeeded in using he bike without the side wheels. Amazingly enough se claims she taught herself to bike because she believed that she can. Saturday morning she was awake very early demanding to be outside and cycling. She demonstrated how well she can bike after just learning to bike on her own yesterday. Another child from the neighbourhood came by to play with her and she convinced the other child that Kaja can teach her how to bike.
I heard the same phrase of believing to achieve what you wanted. So she went and starts teaching the other girl how to bike without side wheels but after a few minutes the other girl stopped and said it’s too difficult. Kaja simply went cycling around until the other girl was convinced to give it another try. Kaja showed her how to do bike correctly and gave strict instructions. After a few minutes of trying she was off cycling on her own. The other girl was so proud that she went showing her parents and grandparents what she just learned and said "Kaja taught me how to bike and only Kaja".
Considering that small children believes they can achieve something they want as long as they believe they can, it applies to everyone of us no matter how difficult or impossible something is we can achieve it if we believe that we can.
Subscribe to:
Posts (Atom)