Network Economics: Why cost intensity and customer experience are so important for operators

February 21, 2019

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By Jasdeep Badyal, Lead Analyst, GSMA Beta Labs

Over the last 12 months, the GSMA Beta Labs has brought together innovators, vendors and operators in the fields of Backhaul, Energy Efficiency and Infrastructure Sharing, and identified over $450m worth of potential savings in a series of case studies. In total, nine case studies have been developed and published, exploring areas where Operators can reduce their Operational Expenditure (OpEx) and Capital Expenditure (CapEX) through the deployment of innovative network technologies – in the world of fast network evolution and moving towards 5G commercial deployment.

These case studies have been validated through the GSMA Network Economic Model (NEM) – a model which first baselines existing network topology, and then iteratively overlays and profiles new disruptive technologies or network management strategies that can deliver efficiencies. The modelling is then ratified via operator review to evaluate their potential impact. As a result, we showcase the “best of the best”, and identify collaborative actions to support operators.

Network economics – why is it so important? A quick and easy answer can quite simply be, “5G”. 5G, the fifth generation of cellular network technology, is attracting global attention in the mobile industry with its capability to cater to new use cases in addition to the traditional mobile broadband use case.

The deployment of the new 5G network is expected to require significant resources. The new features of 5G, intending to address diverse requirements from numerous applications, will increase the complexity of operations leading to additional costs. With ARPU (Average Revenue Per User) stagnating in many markets, how will operators offset the substantial investment required in their networks?

As innovation in the industry changes on a day to day basis, in this fast-paced environment, we too need to develop our tools to keep up. In this case, Beta Labs has identified other ‘performance measures’ which might be at the forefront of network operator thinking. The measure selected – customer experience.

The immediate thought: how important is customer experience for today’s networks? The GSMA believes that implementing specific network improvements is important for operators in order to enhance customer satisfaction. If an operator can identify the right technologies that improve voice, video and messaging services – it not only has the ability to reduce churn but it can also have a positive impact on brand perception. In addition, when we assess the customer experience of OTT service providers, such as Netflix, the focus on quality is significant, and rightly so.

But how do we help operators identify such technologies and the subsequent effect they may have on the overall customer experience? Last year, we spoke of a working relationship between GSMA and Huawei with the objective of enhancing modelling efforts which help solidify the messages from our successful case studies.

In the run-up to MWC19, we are pleased to announce the alignment of the NEM and Huawei’s (Network Experience Index) NEI model has been progressive and successful to the point where we are now able to estimate both the economic and customer experience impact of applicable network transformation technologies or strategies.

With the evolution of the baseline NE model completed, by adding the additional dimension of network performance analysis, we seek operators in the community to help us in the validation process. We believe MWC19 in Barcelona to be the perfect starting point for this.

If you would like to learn more about the Network Experience Index or the Network Economics Model please get in touch with the Jasdeep Badyal, Lead Analyst, Beta Labs jbadyal@gsma.com.

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