3-challenges-to-plan-profitable-5g-networks
3 MIN READ

The 3 CAPEX challenges to planning profitable 5G and network ROI

Muhannad AlAbweh
May. 10 2022

5G networks offer myriad and diverse service possibilities, each with unique connectivity characteristics and underlying business models. Alongside higher spectrum frequency bands, diversification of network equipment form- factors and the introduction of advanced air-interface optimization technologies, this all adds up to much more complex rollout, expansion, densification and optimization challenges.

And yet it’s not entirely clear where the revenue will come from. Flat/declining ARPU is making it more important than ever that CSPs target their network investments in areas with the highest potential for sustainable growth and optimal return on investment (ROI). 

While the maturity of the CAPEX allocation process may vary from one CSP to another, there are common challenges

  1. Network design is typically organized as a separate process from the business analysis of the network’s total cost of ownership (TCO), time to market (TTM) and ultimately network ROI. 
  2. CSPs need more visibility into not just how the network is performing today, but how to plan for mitigating against future poor QoE and churn hotspots and optimizing predicted revenue growth. In a sentence, CSPs need to be able to model ‘what-if’ scenarios, predict the business impact of various network investment decisions, and systematically optimize their planning decision-making for business outcomes. 
  3. It’s not just about where you place cell sites to serve your customers; it’s about how fiber backhaul costs could affect the economics of your network rollout. It’s also about the lifecycle of the network and how it adjusts to changing circumstances.

The good news is that there’s a lot of data and insight out there that can enable you to plan better: business data concerning service demand, customer behavior, subscriber density and equipment TCO (all data that’s available from inside your business today) can now be combined, modeled and predicted in ways that were not previously possible. 

Beyond this, market context data such as population density and household income can also enrich your perspective of how investment in different areas will impact on revenue, churn and network ROI.

And that’s where Smart CAPEX comes in, a new approach enabling operators to map 5G traffic and revenue potential – a very simple summary of a very complex process that intelligently finds, uses, and learns from multiple sources of data.

Smart CAPEX enables the CTO and CMO organizations to work in an agile, joined-up way, to quickly understand the impact of their combined investments and decisions on future business performance, ultimately ROI, by translating complex ‘what-if’ scenarios into predicted network capacity utilization, TCO, revenue and churn.

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Right now, you can view heatmaps that tell you network capacity, potential revenue and population density. You can plan months ahead. When data points can incorporate weather, road planning, power demand and more, your network planning becomes exponentially smarter. The prediction business may not be infallible but it’s going to become more and more reliable, thanks in no small part to AI and ways in which it learns more about the network and applies that learning.

Planning is also going to have to take into account the disaggregated nature of network architecture as virtualization and multi-vendor networks become realities – and also the more dynamic nature of the vendor ecosystem that supports that architecture.

We are already responding to change through our ongoing adaptation of Smart CAPEX to the cloud – enabling planning systems to operate from a single cloud environment. In fact, we are the first to market to support that opportunity.

The planning process was already complicated; and it’s going to become a whole lot more complicated. But we are ready for this, just as we are ready for multiple evolutions and revisions of 5G and – eventually – 6G.

Planning – every aspect of it – is a big opportunity.

To find out more about the Smart CAPEX solution, and how you can use its AI/ML-based network planning, optimization, and modeling to deliver a mobile network with the highest revenue potential, please visit the Smart CAPEX solution page.

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