Here's an interesting article from Ericsson on the business case of mobile broadband. Taking CAPEX, OPEX for both access and core network into account, the article comes to the conclusion that once an economy of scale is reached in terms of the number of broadband subscribers, the network can deliver 1GB of data for one Euro.
While this is the main outcome of the paper, there are a number of other pieces of information in there on which the calculation is based which are quite interesting. Here are some which I noted:
- 20% of the cells carry 50% of the traffic. I've heard of similar numbers before and I think it's a good thing because the network operator can focus on upgrading a subset of all cells rather than having to work on the whole network simultaneously.
- 3-5% of the cells carry very heavy load. The article doesn't say where such cells are usually located. It would be interesting if this load is mostly generated in-house, for example in shopping centers, train stations, airports, etc. and if femtos would provide a cheap future capacity extension for those places.
- The technical evolution of 3G networks is all about keeping pace with higher user demand for capacity. Fully agree to that.
- Going from 7.2 MBit/s to 21 MBit/s adds a cost of around 10-15% but increases capacity around 70%. An interesting statement because 7.2 -> 21 MBit/s is about a 3x theoretical speedup while from a practical point of view it is much less. The article says its 70% or 0.7x.
- 70% of overall CAPEX is spent on base stations.
- 50% of overall OPEX is spent on base stations.
- The €1 per GB seems to be a number over a 5 year period. At the end of the article it is stated that the networks that Ericsson looked at for the study are not quite there yet. However, the first network, after 2 years of operation, reported that they have reached €2 per GB.
- For the study, a base station price of €40k was assumed. Looks like they have gotten quite a bit cheaper than what was calculated with just a couple of years ago.
And just to get a bit more aggressive, this Ericsson presentation states that mobile broadband is even cheaper than DSL (cp slide 13 ff.). I assume that leaves IPTV delivery out of the equation, but still it's an interesting way of looking at things.