STEM applications and examples

Network-transformation modelling

Technology does not stand still, and nor can service-provider business models. Services may evolve through network cannibalisation in the short term, but leaps in functionality and core replacement make wide-ranging network transformation projects inevitable.

Re-building a network from the ground up offers a once-in-decade opportunity to improve business results through an enhanced service portfolio and increased operational efficiency. Determining an optimal strategy requires the meticulous comparison of wide-ranging scenarios for market evolution and technology development based on a model detailed enough to capture the complexity and topological specifics of the core network.

STEM (Strategic Telecoms Evaluation Model) provides a robust and efficient platform for creating business and investment plans which embrace alternative market, technical and economic futures. STEM automatically generates a demand and cost allocation framework, geographical variants and scenarios, and calculates consistent service revenues, equipment installation, utilisation and replacement, capex and opex. You can focus on the network architecture and topology and business dynamics while STEM manages the integrity of the underlying calculations.

Network-evolution modelling process

Migrating separate voice and data services to a common NGN platform

The majority of incumbent operators worldwide carry voice traffic on traditional circuit-switched networks. Data services such as ATM or frame relay are typically handled by separate network architectures where each service is switched separately. Major capex and opex savings may be made by migrating these services to a common NGN platform where individual services are delivered at the edge of the network by multi-service access gateways.

The best strategy will vary according to the design and age of the existing network. STEM has been used to create a reference model which explores the cost implications of different scenarios for this transition and offers a scaleable methodology for modelling these diverse network architectures.

Service architectures in transition Network topology

Three scenarios are modelled: a proactive migration, where equipment in the traditional networks is removed before the end of its life and replaced with IP equipment; a ‘migrate as required’ migration, where equipment is replaced only when it reaches the end of its life; and no migration, which is used as a base case to examine the effects of not migrating to IP at all.

The key results are the different operating costs, capex and depreciation for the various networks and scenarios considered. This model provides a natural basis for exploring the incremental revenue opportunity that the new IP platform provides, e.g. video-on-demand services.

Extra structure for video-on-demand services Incremental business case results

Adding data revenues in transition to W-CDMA

An established GSM cellular network operator provides voice and low-speed circuit-switched data services. This network will be adapted to provide GPRS packet-switched data services and eventually UMTS voice, packet- and circuit-switched data services. A STEM reference model captures independent scenarios for the leasing of existing GSM base stations and site-sharing for new roll-out of UMTS coverage.

Migration from 2G to 3G and growing importance of data revenues

Demand for services from different customer revenue types is mapped into common network circuit or bandwidth requirements, and then disaggregated into different geographical classifications in order to capture critical configuration and cost distinctions in the deployment. STEM defines the structure and executes the calculations, while all the input variables are available to the user in a linked Microsoft Excel spreadsheet.

GSM, GPRS and UMTS services

Interface between STEM and Excel

Managing complexity

Network-transformation models are likely to undergo very many iterations as topics are understood and propositions refined. STEM’s logical separation of structure, data and generated calculations enables these models to be agile with respect to modification and extension, and the tool is therefore the natural choice for these vital applications. An add-in toolbar interface for Excel has helped the majority of our customers to use Excel as the main interface for inputs and results when working with non-STEM-literate colleagues, and can also be used to generate financial outputs in a range of management formats.

STEM has the power to communicate business logic, and to iterate model structures with speed and confidence. Decision makers will have greater confidence in models built on a reliable, standardised business-modelling platform.

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