Here’s a link to another fascinating article published in an Ericsson’s "Review" periodical. This one deals with the technology and business case to cover rural areas with 3G WCDMA HSPA for mobile telephony as well as for fixed and mobile broadband Internet access. I was quite surprised to see Ericsson disclosing and discussing a number of very interesting numbers in a public paper.
One part of the document deals with the technical background information on the WCDMA 850 MHz network deployment by Telstra in Australia. The paper describes how different factors such as antenna types and configuration of base stations, indoor and outdoor directional antennas at customer sites influence both the coverage area of a base station and throughput per user at the cell edge. Ericsson says in the paper that the typical rural 3G cell in the Australian outback has a cell radius of 60 km. Indirectly, they also mention in that for this scenario the land needs to be flat, the radio tower needs to be very high and directional outdoor antennas are required at the subscriber’s home. Note: Telstra’s got a coverage map online here, type in 6450 as postal code to get started)
Another part of the document deals with a business case for a 3G network generally and for rural deployment specifically. They base their calculation on a network with an average rural cell radius of 12 km and 15 inhabitants per square kilometer. Some noteworthy figures:
- CAPEX for upgrade of an existing GSM site to 3G: € 240.000. I assume this is the price of the base station plus site preparation, installation, etc.
- For their calculation they use a voice telephony ARPU (average revenue per user) of €15.- a month, €3.- a month per subscriber for mobile data and €1.- a month per subscriber for mobile TV. In addition 40% of the subscribers use the network for broadband Internet access as ADSL is not available.
With those numbers, Ericsson calculates that the cell generates €212.184 a year in voice, mobile handset data and mobile TV revenues. Broadband internet adds another €132.000 to that. A clear statement that data revenues are strong but the main revenue is still made with mobile handset voice and data applications. With a 6 year deprecation and annual OPEX costs of €40.000 of the cell, Ericsson estimates the cost of the cell to be around €80.000 a year which translates into a gross margin of the site to 75%.
And finally it’s also quite interesting to see that the paper clearly pushes 3G’s advantage over WiMAX, i.e. combined broadband Internet and voice telephony service with one infrastructure and lays out it’s arguments accordingly. A similar paper from the WiMAX industry laying out their arguments so one could compare would be nice. If you have seen one, please let me know.