1. Business modeling for future broadband PPDR networks Henryk Gierszal, Karina Pawlina, Piotr Tyczka, Krzysztof Romanowski, Damien Lavaux, Christos Katsigiannis

2. Presentation plan Introduction End-users’ requirements Business models for PPDR system acquisition and operation Business-oriented tool A case study analysis Conclusions

3. Introduction Due to evolution of technologies and some new needs required by PPDR organizations the migration to broadband mobile networks becomes an emerge issue to be deployed in near future in an efficient way The new services needed by PPDR agencies include broadband data and even video transmission but voice and narrowband data remain indispensable for every day

4. End-user requirements identified Three operational scenario were defined by end-users: Routine day-to-day activities Major events - planned in advance – higher communication needs are needed as compared to routine day-to-day activities but the location and requirements are known in advance Major incidents or disasters - not pre-planned – higher communication needs have to be available at very short notice and the location and requirements are not known in advancea

5. Main services needed by PPDR

6. Business models Analysis of business models allows finding an optimum solution for acquisition of the new network that can balance CAPEX and OPEX Three strategic groups have been identified: –dedicated networks — they are built by PPDR organizations themselves, or the building process and then operation of the new network are done by the commercial operator based on a turnkey contract –commercial networks — PPDR services are provided by commercial operators and are based on their public networks that can be fitted to end-users’ requirements in some areas –hybrid networks — some parts of the broadband infrastructure are based on dedicated network(s) acquired by PPDR organizations, and simultaneously existing public network(s) are deployed in the other parts of that infrastructures

7. Models for system acquisition

8. Levels of business modelling technical — identification of functionalities and the dimension of a communication system financial — financial analysis including cash flow, CAPEX and OPEX economic — estimation of different economic benefits that an end-user can gain due to acquiring a new system that are expressed in money organizational — allocation of investments and operating/managing/maintaining costs associated with a communication system into entities of three roles: owner, operator (MNO or MVNO) or user

9. Steps in configuration of PPDR system using a tool developed 31 functionalities classified into 6 groups up-to three system technologies selected among: LTE, TETRA, TEDS, DMR, P.25, TETRAPOL, cdma2000, WiMAX and SATCOM parameters for network elements of each system: – coverage – number of terminals, BS’s, exchanges, NOC’s – backhaul and backbone networks

10. Analyses Bottom-up analysis provides a set of financial- economic factors to assess the business efficiency of a scenario – a scenario creats a superposition of all deployed network elements belonging to all systems – each system can be based on seperate business model for its acquisition Top-down analysis adjusts the value of parameters (e.g. dimension of a system, a number of terminals, a number of base stations, a number of years of investment) for assumed maximum expenses – modification of parameters introduced in the bottom-up analysis in order to tune and optimize the overall result for a known budget

11. Result template configuration characteristic of each network component of the system – dimensions of each network, resulting functionalities, etc. financial data and efficiency indicators presented in an aggregated or break-down form – Total Cost of Ownership (TCO), CAPEX and OPEX, Net Present Value (NPV), Internal Rate of Return (IRR) economic data and efficiency indicators presented in an aggregated or break-down form – Economic NPV, Economic IRR, Benefit-Cost ratio (B/C), Dynamic Generation Cost (DGC) organizational analysis Strength, Weakness, Opportunity, Threat (SWOT) analysis

12. A case study Polish energy sector’s company is going to acquire a digital system and wants to compare two options: – TETRA built by its own – leased services based on CDMA2000 network provided by a commercial network operator no. of terminals: – 7,500 handheld – 15,000 for data transmission no. of BS’s: 250 a lifetime of the project: 15 years investment period: 4 years a number of masts: existing — 30%, to be built — 40% and to be leased — 30%

13. Results Business modelOPEX per km 2 TCO per km 2 System 1: Own network - TETRA569.62 € 57.78 € System 2: Leased service - CDMA2554.41 €173.06 € CAPEX, OPEX and TCO can be expressed in absolute and relative values

14. CAPEX and OPEX

15. Conclusions broadband PPDR networks based on LTE/LTE-A emerge soon their acquisition depends on many factories but overall costs seem to be a significant constraint for the decision-makers hybrid business models can ensure a reasonable trade-off between TCO and many quality parameters (Quality of Service, coverage, etc.) to simulate these costs one can use the tool for technical and financial-economic analyses because it can support the PPDR decision-makers to select the optimum strategy in order to acquire a mobile communication system that fits to their new requirements