By Martin Griffiths, Managing Director Forensic RF
Summary
This paper makes five points;
1 – Price increases on pretty much everything to consumers and businesses are all sky rocketing.
2 – No one and no business are immune from this.
3 – 5G SA (Stand Alone) is highly likely to require Contract SIMs and dedicated mode surveys will be necessary.
4 – The cost of our programable SIM contracts have been factored into the sale price of a Lima solution, so customers are insulated from the economic calamity coming down the tracks.
5 – If you are not insulated, the cost of undertaking RF Surveys could be cost prohibitive.
We have all purchased a cheap printer and the cost of the replacement ink renders the printer unusable.
Introduction
This paper will consider the current economic outlook and how Cellular Service Providers will respond to this. I’ll also consider the implications to RF Propagation Surveys of the future.
Shortly, an envelope will land on our door mats. It will be brown and I will pick mine up with a sigh and weary resignation. After several coffees and some contemplation (some may say procrastination) I’ll tease it open and review what my new monthly household energy costs will be and consider adjustments I may need to make to accommodate them – like put the kids to work! In the UK our energy bills are likely to triple.
Before you stop reading – this is a blog about RF Surveying – stay with me.
We have economic pointers all going in the wrong direction for the foreseeable future – we have an imperfect storm – some economic observers think that we are looking at the toughest household squeeze in living memory, certainly since the 1970’s when interest rates went up to 15%. No business is immune from this upward trajectory on running costs, including FA.
Logistics and energy are two key causes of this uplift.
Businesses respond by increasing prices to the end user – after all – that is what the energy companies have done. Only by maintaining margins and profitability will a business justify its viability.
I’d like to consider two things for the rest of this paper before I bring things back to RF Surveying;
- Operational Expenditure of Cellular Service Providers
- Technology enhancements around 5G
Operational Expenditure of Cellular Service Providers
A Cellular Service Provider maintains a network of thousands of base stations for 2G, 3G, 4G and of course 5G. Each base station requires power and integration into the core network. In addition, each site will require periodic testing, maintenance, optimisation, upgrades, commissioning and in some cases de-commissioning. The core network itself consists various components including a network of interconnected switch sites. Additionally, links to other Cellular, Fixed and VoIP providers and the Internet are critical for global connectivity, as is service and operational management (including billing systems), and that is before I consider back-up and redundancy in the event of catastrophic events.
The bottom line is that there is a lot to power consumed and the cost of this power is going through the roof.
Technology Enhancements around 5G
Everyone is agreed that 5G will dominate over the next few years – exactly when it will be fully deployed and be operating commercially as a stand-alone network is still open to debate as it will be affected by economic conditions. Cellular Service Providers exist to generate revenue – to that end, they are hostages to economic fortune and the prevailing economic conditions matter. New technologies require investment and investment carries risk. Risk increases when we have uncertainty – we live in uncertain times as I am sure you have noticed. The enemy of progress and innovation is uncertainty and this can lead to latency and delays – projects can be put on ice, big spend is reconsidered. As I say – 5G is coming – but potentially slower than we may think.
The radio environment
We always talk about a radio environment as being dynamic and in a constant state of flux. This is true and is a function of radio propagation. RF signals are affected by the built environment and the topography of an area which can affect a radio signal in the following ways – to reflect, absorb, refract or block a signal – and often in combination. This is a complex environment and will become even more so with the advent of 5G Stand Alone (SA) technologies.
The current deployed network architecture is Non Stand Alone (NSA) – essentially 4G infused with secondary 5G cells.
When 5G dominates, and Stand Alone (SA) is the primary radio environment, it will respond to the needs of subscribers in an active and automated way to ensure that each cell is utilised as efficiently as possible, to squeeze the maximum capacity out of a cell as reliably as possible. This means more subscribers with lower data rates or fewer subscribers with higher data users. Either way, this translates to optimised cells, efficient utilisation of resources and maximum revenue generation.
Some of the new 5G SA techniques include the utilisation of beam forming antennas directing radio signals to where they are needed most within a cell, and self optimised networks configuring the RF environment in a virtual way – even spinning up extra cells when the conditions dictate.
This automation and virtualisation means that measuring cellular coverage in idle mode alone may not be enough. The ability to generate traffic from a specific location within a cell and see how the network responds may be a critical part of a survey. Idle mode surveying is always “worth doing” – but will need to be augmented with dedicated mode surveys. Only by doing this will you get the full picture of coverage.
Traditionally, service providers have restricted access to new services and new technologies to avoid swamping them with large volumes of traffic – it is undesirable to stress the network. Service providers will “turn on the gas and gradually turn up the heat” in a controlled and predictable way. In order to maintain this control they will use tried and tested techniques to restrict subscribers. Traditionally, this is done in two ways – they will either hike the price of new services to make it unattractive and uneconomic to many, or they may utilise SIM based restrictions on groups of subscribers.
Contract SIMs are the most attractive to a CSP as they offer predictable and repeatable revenue streams. PAYG SIMs are typically a lower priority as their revenue stream is unpredictable.
Remember the economic challenges I alluded to earlier?
If you agree with my economic assessment you will recognise that a service provider will have to raise prices or tariffs in order to address these inflationary pressures. As I write, this is currently running at 8% but according to mainstream media, is likely increase to 10% over time.
If you agree with my conclusions that surveying in both idle and dedicated mode, will recognise that this will be more expensive in the future due to the increases in the cost of tariffs.
The potential requirement for Contract SIMs to be required to undertake dedicated surveys of 5G SA cells will add additional operational costs to the running of an RFPS department (it took a long time to get PAYG VOLTE).
If contract SIMs were required – at least four would be needed (one for each network). Over time this is likely to increase.
The cost of future SIM contracts is currently unknown – although we know the inflationary pressures they are under – so tariffs will rise, but we don’t know how fast or by how much.
I will assume a monthly contract cost of £10 per SIM on any given network.
Each SIM slot will add £40 per month in RF survey costs – without doing a survey – This would be to each SIM slot if each slot can support up to four SIMs. The more SIM slots you populate the more you add to the monthly costs of surveying.
Even if you were able to stick with PAYG and dedicated mode was allowed on 5G SA from day 1, the tariff charges would be higher than ever due to the economic pressures. PAYG services are always the most expensive way to connect to cellular data services.
A worst-case scenario could be 48 SIMs (12 SIM slots x 4 networks) this could be up to £480.00 per month per unit which would be huge – two units would be £960.00 which is of course an extreme but you can see where this could go.
If things get really bad, we could see similar things happening in the MVNO space which has happened in the Energy Market. Virtual Network Operators whose business models fall over as they have failed to secure capped tariffs from their “parent” service providers could be forced to sell their services at less than cost which would put them out of business.
The genius of our Lima solution is that contract SIM costs has already been considered and factored into the solution. Our users are largely insulated from cost variations due to the inflationary pressures. Our Contract, Programable SIMs are probably your salvation if the economic challenges we face land hard.
With Lima SIMs, our data volumes are calculated across our whole SIM estate, rather than on a SIM by SIM basis – the aggregate data usage balances out when some Lima’s are idle on a given day and others are active.
There is a perceived price differential between Lima and other SIM based solutions on the market.
There are three things that should be considered when selecting RF equipment.
- Capital costs (cost of the kit) – These include the year 1 cost of the capital equipment. For Lima this included the cost of the SIM voice and data contract.
- Operational Costs – These will be variable and carry risk whereas you have predictability and certainty with our Lima Cell Monitor RF Solution.
- Year 2 – year 5 costs should be factored in to get the total cost of ownership.
Capital costs can include the equipment, support, maintenance and in the case of Lima – the SIM package.
Lima is modular and designed to reflect the prevailing radio technologies but can then be updated as technologies evolve.
If the operational costs can be insulated from economic variations, then the total cost of ownership (cost of equipment and running costs over the life of the equipment) will be controlled, predictable and lower over the life of the equipment.
If the cost of dedicated mode surveys has not been factored into the design of a solution, the operational costs could be so significant that they could render RF Surveying unaffordable.
We believe that Lima represents the most cost effective, elegant solution in the market today.
To round off I’m going to repeat what I said at the start. I’m sure many of you have bought a low-cost printer and have then been very surprised by the eye watering cost of inks and consumables – well welcome to one vision of what the future of RF surveys could look like!
