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Abstract — In recent years WiMAX has been presented by its promoters as a complete solution for the broadband access market. Since it is a wireless technology, it can easily serve the most remote and difficult areas. Even more important, the mobile version of WiMAX added the potential of sustainable growth and later adaptation of all its services to compete at the fixed and mobile markets. This paper attempts to analyze the relevance of WIMAX for emerging markets where the demand for broadband services is growing at a very fast pace, and wireline infrastructures either do not exist or are not in an appropriate state of conservation. To support the study, a techno-economic analysis was performed for the region of Luanda, Angola, taking into consideration geographic and demographic conditions, different service packages, tariffs, roll-out strategies, and sensitivity to adoption rates. The results show that WiMAX can be a feasible and profitable solution specially suited for emerging markets. Index TermsEmerging markets, Luanda, Technoeconomic, Mobile WiMAX I. INTRODUCTION WiMAX technology has appeared as a potential solution for a variety of scenarios. The initial hype for using it as the ultimate solution for all situations has been gradually reduced due to limitations presented by its early implementations. Although difficulties were encountered when trying to deploy WiMAX as a competitor to existing 3G networks, it still seems attractive for emerging markets. In such markets, broadband access is growing at a much faster rate than the existing infrastructure can support - or such infrastructures simply do not exist. The resulting “near- greenfield” situation is ideal for the fast deployment features of WiMAX. In these circumstances WiMAX can still be seen as a complete broadband access solution. WiMAX is specially suited for remote and rural areas, where other technologies were not able to be implemented in a profitable way. New entrant local access operators can also find in WiMAX an attractive solution to establish a fast response in the markets were they wish to have a presence.- since even power supply can be locally managed (e.g. by using strategies as in [6]) This work presents a study about the real potential of WiMAX solutions in emerging markets, considering geographic, demographic and economic factors, together with service bundling, network planning, and deployment strategies. The target region was Luanda, Angola’s’ capital, where we considered a Mobile WiMAX solution. The reasons for this choice came from the larger variety of services that could be provided (multimedia, voice, and data) enabling individuals, companies and institutions with the possibility of incorporating information society tools in Bruno Lopes is with Portugal Telecom, Portugal. Rui L. Aguiar and Manuel de Oliveira Duarte are with Instituto de Telecomunicações, Universidade de Aveiro, Portugal. their patterns of life and work, therefore helping in the fight against “Internet illiteracy” and “Digital Divide”. Future evolution scenarios are also possible, capitalizing from the evolutionary paths offered by 802.16m. Furthermore, in the course of this study it also became clear that the techno-economic evaluation tools frequently used in other contexts (e.g.: STEM [1], TONIC [2], etc) were not well suited to address the specificities of WiMAX in an emerging market, namely the flexible roll-out planning requirements, and the specific network architecture involved. For this reason a custom techno-economic evaluation tool was developed which proved to be very flexible and effective. The following Section briefly summarizes WiMAX technology. Section III will describe the model applied to the city of Luanda. Section IV presents our results, while section V concludes the paper. II. WIMAX A. WiMAX technology The WiMAX origins start from the 802.16 IEEE Wireless Metropolitan Area Network (WLAN) standard. 802.16 was originally focused in providing fixed wireless broadband access for competing with the wired access solutions such as DSL or cable. It was also developed for a wider range of applications, such as backbone functions or mobile access. The main advantages of using this wireless technology were the low costs of deployment and OPEX savings when compared to wired structures, the possibility of deploying in difficult areas where the traditional wired solutions were not feasible, and the time to deploy the network when compared to the cable-based solutions [5]. Mobile WiMAX [7] is usually known as the 802.16e- 2005 version, adopting the OFDMA PHY layer. Mobility is possible at vehicular speeds (~120 km/h) with handover and roaming support, and bit rates up to 50 Mbps are supported. Mobile WiMAX is able to operate at Non Line of Sight conditions. The channel bandwidth may vary from 1.25 to 20 MHz and it supports both Frequency Division Multiplexing (FDM) and Time-Division Multiplexing (TDM). B. WiMAX architecture WiMAX architecture is divided in three main components: Subscriber Station and Mobile Station (SS and MS), Access Service Network (ASN), and Connectivity Service Network (CSN). ASN is responsible, amongst other functions, for providing Layer 2 connectivity to the MS, transferring MS messages to its Home Network, for network registration purposes. In order to allow for mobility, the ASN has also to support ASN and CSN anchored mobility as well as Paging and Location Management. [4] Techno-economic study for a Mobile WiMAX solution in an emerging market: a case study for Luanda Bruno Lopes , Rui L. Aguiar , and A. Manuel de Oliveira Duarte 978-1-4244-2937-0/09/$25.00 © 2009 IEEE 149

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Page 1: [IEEE 2009 International Conference on Telecommunications - Marrakech, Morroco (2009.05.25-2009.05.27)] 2009 International Conference on Telecommunications - Techno-economic study

Abstract — In recent years WiMAX has been presented by its promoters as a complete solution for the broadband access market. Since it is a wireless technology, it can easily serve the most remote and difficult areas. Even more important, the mobile version of WiMAX added the potential of sustainable growth and later adaptation of all its services to compete at the fixed and mobile markets.

This paper attempts to analyze the relevance of WIMAX for emerging markets where the demand for broadband services is growing at a very fast pace, and wireline infrastructures either do not exist or are not in an appropriate state of conservation. To support the study, a techno-economic analysis was performed for the region of Luanda, Angola, taking into consideration geographic and demographic conditions, different service packages, tariffs, roll-out strategies, and sensitivity to adoption rates. The results show that WiMAX can be a feasible and profitable solution specially suited for emerging markets.

Index Terms— Emerging markets, Luanda, Technoeconomic, Mobile WiMAX

I. INTRODUCTION

WiMAX technology has appeared as a potential solution for a variety of scenarios. The initial hype for using it as the ultimate solution for all situations has been gradually reduced due to limitations presented by its early implementations. Although difficulties were encountered when trying to deploy WiMAX as a competitor to existing 3G networks, it still seems attractive for emerging markets. In such markets, broadband access is growing at a much faster rate than the existing infrastructure can support - or such infrastructures simply do not exist. The resulting “near-greenfield” situation is ideal for the fast deployment features of WiMAX. In these circumstances WiMAX can still be seen as a complete broadband access solution.

WiMAX is specially suited for remote and rural areas, where other technologies were not able to be implemented in a profitable way. New entrant local access operators can also find in WiMAX an attractive solution to establish a fast response in the markets were they wish to have a presence.- since even power supply can be locally managed (e.g. by using strategies as in [6])

This work presents a study about the real potential of WiMAX solutions in emerging markets, considering geographic, demographic and economic factors, together with service bundling, network planning, and deployment strategies. The target region was Luanda, Angola’s’ capital, where we considered a Mobile WiMAX solution. The reasons for this choice came from the larger variety of services that could be provided (multimedia, voice, and data) enabling individuals, companies and institutions with the possibility of incorporating information society tools in

Bruno Lopes is with Portugal Telecom, Portugal. Rui L. Aguiar and Manuel de Oliveira Duarte are with Instituto de

Telecomunicações, Universidade de Aveiro, Portugal.

their patterns of life and work, therefore helping in the fight against “Internet illiteracy” and “Digital Divide”. Future evolution scenarios are also possible, capitalizing from the evolutionary paths offered by 802.16m.

Furthermore, in the course of this study it also became clear that the techno-economic evaluation tools frequently used in other contexts (e.g.: STEM [1], TONIC [2], etc) were not well suited to address the specificities of WiMAX in an emerging market, namely the flexible roll-out planning requirements, and the specific network architecture involved. For this reason a custom techno-economic evaluation tool was developed which proved to be very flexible and effective.

The following Section briefly summarizes WiMAX technology. Section III will describe the model applied to the city of Luanda. Section IV presents our results, while section V concludes the paper.

II. WIMAX

A. WiMAX technology The WiMAX origins start from the 802.16 IEEE Wireless Metropolitan Area Network (WLAN) standard. 802.16 was originally focused in providing fixed wireless broadband access for competing with the wired access solutions such as DSL or cable. It was also developed for a wider range of applications, such as backbone functions or mobile access. The main advantages of using this wireless technology were the low costs of deployment and OPEX savings when compared to wired structures, the possibility of deploying in difficult areas where the traditional wired solutions were not feasible, and the time to deploy the network when compared to the cable-based solutions [5].

Mobile WiMAX [7] is usually known as the 802.16e-2005 version, adopting the OFDMA PHY layer. Mobility is possible at vehicular speeds (~120 km/h) with handover and roaming support, and bit rates up to 50 Mbps are supported. Mobile WiMAX is able to operate at Non Line of Sight conditions. The channel bandwidth may vary from 1.25 to 20 MHz and it supports both Frequency Division Multiplexing (FDM) and Time-Division Multiplexing (TDM).

B. WiMAX architecture WiMAX architecture is divided in three main components: Subscriber Station and Mobile Station (SS and MS), Access Service Network (ASN), and Connectivity Service Network (CSN). ASN is responsible, amongst other functions, for providing Layer 2 connectivity to the MS, transferring MS messages to its Home Network, for network registration purposes. In order to allow for mobility, the ASN has also to support ASN and CSN anchored mobility as well as Paging and Location Management. [4]

Techno-economic study for a Mobile WiMAX solution in an emerging market: a case study for Luanda

Bruno Lopes , Rui L. Aguiar , and A. Manuel de Oliveira Duarte

978-1-4244-2937-0/09/$25.00 © 2009 IEEE 149

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CSN is responsible for providing IP connectivity to the SS/MS. Its functions include IP address allocation for different user sessions, AAA services as proxy or server, Policy control as well as QoS management based on the user Service Level Agreement (SLA) or negotiated parameters. It is also responsible for subscriber billing and inter-operator settlement, inter-CSN tunneling allowing roaming, inter-ASN mobility, and access to the WiMAX services provided and the Internet.

III. TOOL AND METHODOLOGY The approach and methodology [3] steps followed in this study can be summarized as follows:

1. Definition of the areas with needs of intervention (infrastructure reinforcement or market dynamics stimulation);

2. Characterization of the defined areas (geography, demography, main socio-economic activities, scarcity at the service level, existing infrastructures, etc.);

3. Identification of the possible scenarios in terms of access and interconnection infrastructure supply;

4. Identification of candidate service bundling and target tariffs;

5. Identification of the candidate network solutions (in the present case, Mobile WiMAX was predetermined);

6. Identification of the applicable regulatory framework (licensing, competition and tendering laws, etc.);

7. Characterization of market scenarios for service supply (possible competitors, partners and stakeholders, potential demand, etc).

8. Comparison of targeted tariffs (as a function of CAPEX and OPEX) versus plausible adoption rates, disposable incomes and willingness to pay.

To support this methodology, a techno-economic tool has been developed. Its main features are the following:

• Support for emerging market scenarios, where networks aren't deployed yet and greenfield deployments are made, focusing in the access network;

• Support for wireless solutions (WiMAX); • Possibility to adapt market scenarios, in order to be

able to approach Angola's reality; • Adapt ranges of services for these markets, allowing

some customization as well; • Include geographical and demographical data as

accurate as possible in order to find the most realistic scenarios;

In addition to the above identified methodological steps, the tool that was developed includes the following input parameters steps, supporting the required flexibility to perform a mid-term analysis (see Figure 1):

1. Market to consider – in terms of area, population and enterprise densities, growth and the corresponding penetration curves.

2. Bundle of services – which is going to be provided to that market, classifying it in terms of bandwidth, market share, and prices that will be applied;

3. Real cost elements associated with the technology that is going to be used (WiMAX), by setting the channel bandwidth, spectral efficiency, and the

number of sectors used in each antenna. It also covers deployment aspects of the selected technology, such as the labor, equipment, and lease costs;

The outputs produced by the tool are total demand, required capacity, CAPEX/OPEX values, and economic results (Investment Return Rate (IRR), Net Present Value (NPV), cash flow, balance, and break-even point).

Fig. 1. Structure of the techno-economic tool The input parameters of the tool are briefly described in the following paragraphs.

A. Market inputs The user will have to insert the values that characterize the target market. This market is distributed in different zones, each one with a different area (which is kept constant during the study period), population share, and also a defined companies/residential customer ratio. What the user needs to use as inputs is the total population of the desired country/city, the population and the companies growth rate, the percentage of the population in each of the zones, and the companies/residential ratio for each of them. After defining these parameters, the penetration curve for each of the zones is defined.

B. Service inputs The service characteristics are defined at this step. On the capacity side, there is the definition of required bandwidth and contention factor used for each service. For the revenue calculation, the monthly fee and the activation fee (according to the type of Customer Premises Equipment (CPE)) are both necessary, as well as the tariff depreciation rate. Then, each service market share is defined for different markets.

C. Technology inputs As our study is focused in an economical analysis of the deployment of a wireless technology, the technology model supported inside the tool was made simple, but considerations were made in order to keep it representative of a potentially real network deployment. The inputs necessary for characterizing the technology which is being used are the number of sectors that each tower will have, the spectral efficiency of the technology used, the channel bandwidth, and the UL/DL ratio (Time Division Duplex (TDD) was considered in this study). The range of the antennas in each zone is also an input since for different kinds of building density or even terrain topography, there will be different coverage possibilities. There is no obligation in reality for this, but in terms of

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model the distances between antennas should evolve by sub-multiples since that way the different growth possibilities are possible. This distance allows the continuous evolution of the antenna placement, fitting it with the bandwidth needs, and increasing locally the network capacity.

D. Expenses inputs In order to find the CAPEX and OPEX values, it is necessary to account for the cost of network elements, labor, CPE, and other equipment. The fiber backhaul connection lease is also necessary since the analysis is being made for the access network and some connection fee has to be paid in order to access the core. Being a wireless solution, the cost of the spectrum is also an important variable. The inputs needed are all of the above costs, as well as the price discount rates (per year) for network equipment and CPE.

III – SCENARIO CHARACTERIZATION: LUANDA Using this tool, a business case study was made. The focus of this study was a Mobile WiMAX deployment in Luanda. Angola's market has the emerging market's characteristics and its population growth and migration to urban areas led to an increase in the population of its city centers. The competition here is moderate, decreasing or disappearing at the peripheral areas. One of the main barriers to expansion is still the lack of an access network in the peripheral areas. A wireless solution here would be optimal, since it could adapt to the expansion of the population and increasing demands of the market. The inclusion of new services is also possible by using a technology such as Mobile WiMAX.

All costs and deployments assumed in this business case were thought from an existing player's perspective, already with some market presence, who wishes to expand the range and profitability of its data and voice services.

E. Market The city was divided into five different zone types, in order to characterize the different markets that are present in each of them. The modeling of the target market was made taking into account the city of Luanda, and its major zones: urban (downtown), urban (residential), suburban (residential), rural 'musseque', and industrial. Urban downtown zone is characterized by a mixture of dense residential buildings as well as several office buildings. It has very high population density and there is an equal share of residential and business customers. The distance of the antennas is kept relatively small in order to preserve the coverage. The type of equipments used by customers are indoor and mobile. The penetration of the offered services is high in this zone but the competition is also high. By focusing in a better service and competitive strategies, market penetration is expected to reach 12% after five years.

Urban residential's main characteristics of density and area are the same as the previous case, but this zone presents a lower share of business customers. It contains about 30% of Angola’s population. The type of CPE used in this area is also indoor and mobile [4], and, like the previous case, high competition is also present, so 12% of penetration after 5 years was also used.

Although much of the metropolis population is present in the dense residential area, there is also a less dense and larger area more distant from the center where many people reside. This zone is Suburban residential, has medium population density and represents a larger share of the total metropolitan area. The residential customer is the dominant case but a small number of companies also exist. The antenna density is low since the buildings are smaller and sparse. The CPE used are the same as above, indoor and mobile. The penetration in these areas is expected to be moderate, not because of the competition, that should be lower, but because of the buying power of this population in this zone. Thus a 12% penetration rate after 5 years is also used. The Rural 'musseque' zone is characterized by a sparsely distributed residential population, mainly in ground buildings, and distributed through a wide area. Business customers are residual. Here antennas are distant between each other and only assure full coverage for outdoor equipments. In this type of zone the competition is rare or non existent, so an higher penetration of the services is expected, although this won't be much higher considering the buying power of the population, so it is fixed at 16% after 5 years. The fifth zone, Industrial, is mainly a peripheral zone where industries are concentrated and where mostly business customers exist. The area occupied is a small fraction of the total metropolis but a high density of companies can be found here. Residential customers here are residual. The antenna distribution in this zone is made as the previous Rural zone, and also outdoor equipments are used in order to assure full coverage. As these areas are far from the city core, a high penetration is also expected since competitors have low presence, so 16% is expected after five years.

F. Services The services that were planned for this deployment are in direct competition with the DSL market and mobile data services [3]. This option was made taking into account the fact that emerging countries are suffering from a severe lack of cyber culture, and, in order to liberate their free access to information (Internet), it is necessary that this is provided to every person. Another attractive aspect of WiMAX is the 'all-IP solution' side of the core, which enables virtually any IP service to be implemented in this network in the future. The services that are presented for the initial deployment could be complemented with a GSM solution for mobile voice using WiMAX/GSM devices. There is also a possibility for network evolution in the services envisaged, including mobile TV, mobile voice, and other multimedia services, with no need for restructuring all the equipment deployed, as the WiMAX technology matures[8]. Another major advantage of this WiMAX wireless solution is that the mobile/fixed data access does not require any differentiation, since all CPE will be connected wirelessly to the access network. The zones where mobility is available are the ones where most of the population resides and where is most probable that customers will require an “always on” type of data service. The peripheral areas won't have any mobility (due to the antenna distance) for cost modeling purposes. Although mobility agents can be in place, fixed stations will use the same authentication

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entities, which means that the same services will still be available for fixed access, even for mobile customers that are roaming from other areas. Three residential (subscription) data plans were considered as inputs, as well as two business plans for companies. Residential plans include a 512kbps/128, 1Mbps/256, and 2Mbps/256 data services (with a VoIP service included) that will have a contention rate of 40:1. Business plans will also offer VoIP and 512kbps and 1Mbps data services using a contention rate of 5:1. VoIP will have a contention rate of 4:1 in both cases. Both business users and residential users have a VIP option, which offers the same bandwidth with lower contention rates (20:1 for residential user and 2:1 for companies for data and 3:1 for voice). In terms of pricing, the WIMAX solutions need to be head to head with potential current solutions in those markets. This allows a certain differentiation in terms of quality offered for the same prices that are being used in the current offerings. The residential solutions will consider as reference monthly fees, from lowest to highest bandwidth, of 115€, 185€, and 265€. Business customers will be charged 300€ and 500€. The VIP subscribers will have a 50% increase over the standard price. The fees charged for the service activation will depend of the type of CPE used, being 350€ for indoor, 250€ for mobile and 500€ for outdoor CPE. All of the fees will have a reduction rate of 5% per year. Note that these values are competitive for the market in Luanda.

G. Technology The services that are offered have different bandwidth needs, and this is the dominant factor for planning the access network. Another major assumption is that the bandwidth needs are uniformly distributed through each area, although some excess in bandwidth capacity may exist. This is a macroscopic approach, since in a real scenario capacity is expected to be deployed where it is needed. When dimensioning the access network, the download capacity will be considered the dominant factor. This is valid in the studied scenario since all the services require lower upload bandwidth and it is quite valid for most of the scenarios where the tool is expected to be used. As stated previously, the capacity of the network will gradually grow, as more towers are placed. Each tower will have a maximum of two overlapping (using different channels) WiMAX 3-sector antennas, using 10MHz per channel. The carrier frequency used is 3.5 GHz, since this is the regulated BWA frequency for Angola. All the initial equipment is expected to be deployed in three years. The calculation of the capacity (Mbps/km2) that each tower may provide was made with the following approximation (disregarding adaptive modulations for higher distances):

( )1/ rULDLeffbsectbandwidth ATDDSChN=Total ∗∗∗∗ The variables above are, from left to right, the number of sectors, channel bandwidth, spectral efficiency, download/upload ratio, and the antenna range. Since the antenna placement will be made gradually, the distance between antennas for each of the scenarios is reduced in sub-multiples of the allowed distance range (e.g. 700 meters to 350 meters in urban scenarios), assuming a

grid disposition of the antennas that gets denser at each network evolution step.

This approach has two main advantages. First, the investment made in each tower is kept constant, since for each expansion the only thing that is changed are the number of antennas of each existing tower to accommodate higher densities. Second, the density of towers in each area is increased when the demand reaches a certain threshold, allowing adaptations to different market variations, avoiding unnecessary investments therefore maximizing profits. Although this does not reflect the gradual evolutionary features of a network, it provides a simpler model that reflects the gradual deployment of increased capacity.

H. Architecture When planning the deployment of the access network, it will be necessary to adapt each type of access network to each of the zone needs. There will be places where no core connection is available and some solution will be necessary in order to connect the base station (BS) towers. The solution used is a peer-to-peer (P2P) link for each of the towers, using the towers inside the fiber backbone covered area to place the P2P microwave equipment. There are two main deployments used in this approach: center and peripheral deployments. In the center access network, the backbone fiber connection is present and the only main CAPEX expenditure is the placement of the appropriate BS, where the core network can be directly connected to each of the installed towers. The placement of the antennas is denser to adapt to the customer density as well as for providing mobile data and even voice at nomadic speeds. The customer equipments used are indoor CPE and mobile CPE, since the coverage reaches all the buildings. Powering BS equipment won't be a problem in these areas since the proximity of the necessary structures will be very probable. In the peripheral deployment, P2P links are required to access the BS towers. The antenna density will be lower also, so outdoor CPE will be used in this case and no mobile CPE customers are expected due to the sparse coverage. The powering of the equipments will be more difficult, since the structures would be distant from the core. As a solution, there are the wind and solar powered [9] “green” solutions, that could have a significant potential in lowering the costs for this type of deployments.

I. Expenses The final input necessary for our model are the expenses. Costs are divided in two classes: CAPEX an OPEX. These costs are quite similar for both central and peripheral deployments. As for the different defined zones, the main difference is in the lease and deployment civil work costs. CAPEX costs would include the fixed initial costs necessary for the BS deployments, including the tower, antenna, ASN-GW, installation and civil works, site acquisition, P2P equipment (peripheral), as well as the costs of the CPE for each customer. These costs will be distributed throughout the five years as the capacity demand increases. Note that the network equipment price discount in each year is assumed to be 10%. The costs associated with OPEX include the BS site lease, maintenance and power supply, core lease, spectrum

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lease, and equipment maintenance. There is also the equipment depreciation in each year to be considered. As discussed earlier for network evolution, the costs associated to the equipment will scale with demand, which adapts to the profits, driving to a better cost/profit relationship.

IV. RESULTS We select three major aspects to present here: CAPEX/OPEX results, economical metrics, and a sensitivity analysis on the most critical factors.

A. CAPEX/OPEX The CAPEX/OPEX for each of the five studied zones are illustrated below. Due to space constrains, we present only some results of those obtained (see Fig.2). In the first place, what the CAPEX reflects is mainly the evolution of the tower and antenna placement over the years, as the demand grows and reaches a certain threshold, where, according to the expected demand growth model, more antenna density (capacity) will be necessary. This discrete step does not necessarily reflect reality, since towers would be gradually placed where bandwidth is needed. Although the investment made in the indoor and mobile CPE is small, the outdoor CPE represents a good share of the CAPEX in the rural and industrial zones.

0 1 2 3 4 50

10000000

20000000

30000000

40000000

50000000

60000000Urban downtown CAPEX

bs site + civil worksCPE mobileCPE indoorASN-GWBS towerBS

year

Cos

t (€)

Fig. 2. Urban downtown CAPEX results

The OPEX is clearly dominated by the core lease costs and staff. Both costs are necessary since the communication to the core networks is crucial in order to allow the services to be provided and staff is needed to manage the network. Revenues (tariffs) have to be able to cover for such costs.

B. Economic outputs The results from this study (see Fig. 3) provided positive results for each of the five considered markets. WIMAC is suitable for the different markets, proving to be a very plausible choice when considering a solution for these developing regions. Note however that the results may overstate some costs: the assumptions made neglect the exploitation of equipment already existing in an incumbent player, which may allow some cost considerations to be discarded. In the Urban downtown zone, the gradual investment made during the five years is clearly compensated, when compared to a full-scale deployment in the first year. It is clear that a first deployment, that enables the full coverage but not the full capacity needed for the future is the best choice to be made (Fig. 3). This solution was proved to be adequate for this mixed business/residential scenario. The

resulting NPV for this scenario was 96,538,442€ and the IRR was 37.37%.

0 1 2 3 4 5-600,000,000 €-400,000,000 €-200,000,000 €

0 €200,000,000 €

400,000,000 €600,000,000 €800,000,000 €

Urban downtown

RevenuesCAPEXOPEXCash flowbalance

year

NPV

Fig. 3. Urban downtown economic results Table 1 presents the final values for all the scenarios.

IRR (%) NPV (€) Urban downtown 37.3 96,538,442 Urban Residential 13.8 20,656,270 Sub-urban Residential 58.8 177,168,013 Rural “Musseque” 94,33 127,341,539 Industrial 58.6 13,857,661 Table 1. Economic results for Luanda’s regions. In a predominantly dense residential scenario, the results are also promising, although a little weaker than the previous case, thanks to a proper “deploy-as-you-need” installation plan. In a medium density scenario, mostly with residential customers, the proposed solution is even more effective. The lower density of the residential buildings allows a better coverage using less antennas. This lowers maintenance costs and fitting antenna density to demand is a quite determining factor to this success. The application of Mobile WiMAX for low density residential areas is also shown to be lucrative, and the best of the five scenarios. There are two main factors for this: in the first place there is lower competition since competitors have high difficulties to reach this market; the second is the lower antenna density required when using outdoor equipments, that reflects in the costs for providing the proposed services in this area. Mobile WiMAX is shown profitable where most of the other technologies were not able to be. As for the business customer areas, the results are also very promising. The reasons for the success of this solution are the same for rural areas, and it is shown that higher demanding services (in terms of capacity) are not a challenge for Mobile WiMAX solutions. NPV is 13,857,661€ and the IRR is 58.59%.

C. Sensitivity analysis We varied several parameters to understand the impact of different inputs in the overall results. To study of the impact of the monthly and activation fees of the services, they were varied in order to evaluate its impact in the economic results for this business case (Fig. 4). The values of all services were placed between -50% to +50% of their original value. The Urban downtown zone's NPV is highly dependent of the tariffs that are charged. Other zones, more or less, follow the same tendency, with the exception of the industrial area. As the revenues increase, OPEX costs like

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structure maintenance remain the same (only increases the core lease and CPE maintenance), so, the more revenues, the more profitable is the bandwidth already deployed. It is important to remember that the penetration variation due to the willingness to pay is not being considered, so a tariff ceiling exists. The slower curve seen in industrial deployment comes from the fact that less customers are present, and the initial CPE costs and the high bandwidth required by business services take longer to compensate.

-50.00%-30.00%

-10.00%10.00%

30.00%50.00%

-400,000,000.00 €-300,000,000.00 €-200,000,000.00 €-100,000,000.00 €

0.00 €100,000,000.00 €200,000,000.00 €300,000,000.00 €400,000,000.00 €500,000,000.00 €600,000,000.00 €

Tarif f v ariation

urban downurban ressub resrur musindustrial

variation

NP

V

Fig. 4. Tariff variation The penetration curve was also tested for different values and its NPV was calculated (Fig. 5). For different penetration rates, the bandwidth requirements differ, so different antenna deployments (density) were used.

-10.00%-6.00%

-2.00%2.00%

6.00%10.00%

-50,000,000.00 €0.00 €

50,000,000.00 €100,000,000.00 €150,000,000.00 €200,000,000.00 €250,000,000.00 €300,000,000.00 €350,000,000.00 €400,000,000.00 €450,000,000.00 €

Penetration variation

urban downurban ressub resrur musindustrial

variation

NP

V

Fig. 5. Penetration rate variation Generically, for a given deployment, the more customers exist, the more profitable it can be. This reinforces the need for extremely scalable deployments, such as increasing bandwidth only in the needed sections, by using 2-phase antenna deployments or increasing BS density strictly where needed. Although this general conclusion was found, there are some apparent “inconsistencies” in the results. The first is the decreasing profits that come from the urban residential zone. This is a dense area where mostly residential customers exist. The reason for such phenomenon is that the costs of the core lease and equipment maintenance in this

dense deployment zone are not compensated by the tariffs proposed to the residential customer. The solution to this issue can be increasing this tariffs to about 40€ more, or adjusting the marketing campaigns for a slower market penetration until the equipment and core lease costs are adjusted to the desired tariffs. The second “curious” phenomenon here is in the apparent drop of profitability at some parts of the curves. This is a consequence of a higher density step in the antenna deployment, as the market required bandwidth at that time exceeded the bandwidth threshold. Although this may seem a problem, in a real deployment this can be avoided by scaling the network locally where (and when) needed, as mentioned before. As a final note, it should be noticed the rapid growth of the suburban and rural NPV with market penetration variation. There is a low cost of deployment and maintenance in both scenarios, being the sparse antenna distribution more present in the rural scenario, although the outdoor antennas cost and the lower number of customers reduces that advantage. This leads to the fact that the amount of customers influences directly the profitability, so a more accentuate rise is expected.

V. CONCLUSION This technoeconomical study was able to prove an initial assumption of Mobile WiMAX adaptability to emerging markets. For the specific scenario where the tool was tested, and within all the social and economical context considered, Mobile WiMAX seems to be a competitive solution. The tool which was created was quite adequate for this type of business case, and its flexibility allows broader scenarios and different emerging markets to be studied. The definition of technology, market, service capacity and costs, and penetration parameters allows a variety of future studies to be made using this same tool. The final economical results are very positive and showed the variety of scenarios where this tool can prove its value, and also where Mobile WiMAX is an interesting choice.

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Overview”, Lecture Notes, University of Aveiro, 2001 [4] WiMAX Forum, “ A Comparative Analysis of Mobile WiMAX

Deployment Alternatives in the Access Network ”, May 2007 [5] Jeffrey G. Andrews, Arunabha Ghosh, Rias Muhamed.

“Fundamentals of WiMAX”, Prentice Hall, February 2007 [6] White paper, “The Solar-Power Alternative in Broadband Wireless

Networks ”, Proxim Wireless, 2007 [7] WiMAX Forum, “ Mobile WiMAX – Part I: A Technical Overview

and Performance Evaluation ”, 2006 [8] Amitabh Kumar, “Mobile Broadcasting with WiMAX – Principles,

Technology, and Applications”, Focal Press, 2008

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