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Tag Archives: Capacity Management

Network Capacity Planning – it’s time to stop getting bamboozled!

Network capacity planning is not a piece of cake! It’s a complicated effort that demands several considerations – not just the capacity of the network, but also the type and volume of the traffic at different periods. Network planners should also be able to estimate the current and future capacity needs and make investments wisely.

Capacity planning involves identifying the areas of network congestion and underutilization and distributing the traffic evenly across the available networks. Considering the sheer number of users across the network, it would require considerable effort from the operators to achieve the results. This is important because the ROI from your network investments depends on how efficiently you utilize the resources. Not just that, it also depends on how accurately you estimate future capacity needs.

Well, abnormal traffic scenarios crop up out of nowhere. A catastrophe, a sensational video or a political upheaval can be the cause of a sudden increase in network traffic.  In such cases, all your network planning strategies can go haywire. As you know, it is utterly impossible to predict such situations, but unfortunately, the likelihood of such instances is also very high. The only way out for Telcos is to prepare the networks to confront such challenges before they impact the customer experience.

On the contrary, there are scenarios when the networks remain underutilized for several hours a day or night. This pattern is often cyclic and driven by user habits. For example, network utilization is minimal during nights for almost all customers. For business users, the usage is less during weekends. For network planners, these idle hours translate into a significant business loss. Though they are aware of these facts, many Telcos are still not able to drive strategies to optimize the network during the idle hours.

Let’s now think about the investment. One of the major concerns for an operator is to identify and prioritize the investment areas. Well, you must have identified hundreds of coverage holes where investments are urgently required; however, you may not be able to throw money in all of them at one go, right? How do you prioritize them and pick the best area suitable for your budget? How do you ensure that these investments will yield immediate returns?

It’s a well-known fact that capacity constraints severely impact the customer experience. Today’s on-the-go customers do not compromise quality. Any network issues can result in customer frustration. Hence, identifying the potential areas of capacity constraints becomes a priority in network planning.

Come to the case of VIP customers. They are the elite group not just due to their social status but also because of their relevance in your business. With several thousands of followers, they make an impact with everything they speak or do. If the poor network affects their day’s activities, it will turn out to be a disastrous deal for you. Think how they will directly or indirectly boost your customer base if things happen as per their wish.

Next, is your capacity planning strategy designed in line with your marketing goals? Why should it be so? Well, the first and foremost goal in any marketing strategy is to identify the potential customers. Before launching a promotion, you should first determine who are the best targets for the products. This requires a proactive marketing approach, which means that you should have the products designed with these customers in mind. For example, before launching a 4G offer, you should understand the availability/affordability of 4G phones among your target group. How will you achieve this?

Gaining insights into network traffic, customer usage habits, marketing metrics, and market pulses require a dedicated network planning.

Stay tuned to know how Subex’s approach to capacity planning helps Telcos address these challenges.

Saurabh Bhatnagar

With over 8 years of work experience Saurabh brings a rich blend of diverse strengths and knowledge, encompassing product development, Customer Experience Management, radio network expertise, and business consulting.
In his current role as Director-Business Consulting at Subex, Saurabh is responsible to help improve Subex their Network Analytics portfolio offerings by assessing weaknesses, recommending solutions and performing technical sales.
Prior joining to Subex, he has worked with some of the giants around the globe- Bharti Airtel, Nokia, HCL Technologies and during his association with respective companies he has played crucial roles in UMTS and LTE rollouts. He holds a Master’s Degree focused in International Business from Symbiosis Pune.

Smart Performance Indicators — Redefining the KPIs

What is measured, is managed. Are you measuring the right metrics?

While driving, most of us would want to reach our destinations on time. An unexpected congestion on the way can easily turn a nice Friday evening into a frustrating start to the weekend. As the world progressed, it changed a lot the way we planned our journeys. Instead of going with the route that we took yesterday; we listened to the traffic updates on radio, kept ourselves updated with any special events around, based on the evening plans we tried to estimate our start time etc. Sounds better than driving with nothing but rear-view mirror & front view, but still too many things to monitor. Then came the Google Maps — one stop solution to get accurate real-time updates based on multiple data sources, scenario planning capability based on different available options & routes. You are still on the driving seat, but you have all the means to make the right decision. Friday evenings are no more frustrating.

This got me thinking – in our work, aren’t we too trying to reach our destinations — in terms of performance, goals & objectives — on-time every day, every quarter, every year? Having worked at two of the largest Telcos in the world, I thought that the performance management systems, in their current form today, need smarter metrics than just measuring what is easy. On their road to 5G and future technologies, Telcos would need something as smart as Google Maps to guide them to their destination.

With this idea and a small team of talented software engineers & data scientists, we have built — what we like to call it — a machine learning based Smart Performance Indicator framework. Using some of the multi-variate principal component analysis techniques, this framework creates meaningful Smart Performance Indicators out of the available metrics.

Telcos today are sitting on enormous amount of data and measuring thousands of KPIs but –

  • Are they measuring the right metrics?
  • Are they combining several metrics and analyzing their correlations & causations instead of just looking at some simple metrics?
  • They are surely measuring the past performance and comparing it with today’s, but are they looking ahead?
  • Instead of looking at the current values, are they looking at trends and statistics?
  • Are they measuring their KPI responses for an unexpected scenario?
  • Are they able to store enough amount of past historical data to be able to predict the future?
  • And most importantly, are the traditional KPIs learning from the changing trends, anomalies and proactively acting to it?

The traditional KPI dashboards today indicate more about how the network performance has been than about where it is going. The focus is more on short-term operational performance rather than long-term strategic performance. We manage what we measure, hence it has become more important than ever to measure the right metrics, smart metrics. Telcos need to measure what’s important, not just what is easy.

SPI-outcome

Sample dashboards with SPI outcomes

If you are working with a Telco and think that the above problems need to be addressed in your organization, we exactly know what you need. Your Fridays should no more be frustrating, feel free to reach out to me at anshul.bhatt@subex.com

Anshul is an Associate Product Manager in the Network Analytics team at Subex. An IIT alumnus, Anshul has more than 4 years of work experience which includes working with two of the largest telecom operators around the world – Bharti Airtel Ltd. and Reliance Jio – across various markets within India. His stints at Airtel and Jio included Network Planning & Operations, Customer Experience Enhancement, Algorithms and Analytics for Network Performance Optimization & Automation. Anshul has two patents in the field of coverage & capacity optimization in LTE radio networks on his name.

Telcos CAPEX is here to stay. Optimizing it is the way to go.

“A lot of people have been talking about how capex is going to come down with SDN and I’ve said, ‘No, it’s going to stay the same for Verizon’  – Fran Shammo, CFO, Verizon. May 2016

This comment right from the head honcho of one of the largest Telcos in US cannot be taken lightly. Despite lot of talk in the industry about SDN / NFV CAPEX reduction benefits, we’re seeing skeptical questions around smooth transition to virtualization. But I will keep SDN /NFV discussion for some other day. Let us focus on the topic – CAPEX spends. Verizon’s CFO has confirmed its CAPEX spend going to stay, despite network virtualization!

The CAPEX focus could be different for different Telcos. For some Telcos like Verizon, their CAPEX spend mainly focused on future technologies, leading the market, greater customer experience etc. For some other Telcos, their budget constraints force them to think hard and do delicate trade-off between strategical “revenue-growth” projects and tactical maintenance projects to keep up with network growth, retain customers, improve quality of experience etc. With this hard balancing at hand, what if Telcos are equipped with smart tools & methodologies that could help in optimizing their on-going CAPEX? But, is such thing exist? I will get there in a moment. Please bear with me.

First, let us go through few industry trends.  In our recent study from Gartner, we got few interesting insights.

Here is short summary on the insights:

  • On an average Telco spends 15% – 20% of annual revenue on yearly Capital Expenditure
  • Increase in Capex spends w.r.t revenue (CAPEX Intensity = Capex / Revenue) is not translating into equivalent increase in revenue growth
  • Correlation between CAPEX Intensity and Revenue growth is a weak factor for Telcos mentioned in the regions. This means revenue growth is not linearly correlated with CAPEX spends
  • 5-year flat growth in revenues across geographies is not encouraging. Max 20% 5-year top-line growth in North America region and deep negative for Europe region (-11%)
  • Cost of capital over last decade is higher than RoI on an average across the industry
  • Notable positive point is the margins are maintained in 25 – 35% range across geographies. And it is imperative to maintain this margins to generate free cash to fund next CAPEX cycle but if not completely.

The above stats where CAPEX spends are not reaping substantial revenue growth indicates two major viewpoints:

  1. Strategic capital investments have a slightly long gestation period but not comparable to capital cycles of traditional industries like manufacturing industry.
  2. Bulk of CAPEX go into maintenance projects. That is, to keep-up with current network demand juggernaut, customer retention, quality of service etc.

For instance, a good chunk of leading Tier 1 North American operator’s CAPEX goes into wireless network for densification and getting future ready for 5G deployments. This could be a case for many big Telcos – investing on future technologies. On the contrary, we have also seen majority of Telcos’ CAPEX going in for second type of investment – meeting current network data growth. This is nothing wrong as such and very much required to keep customers happy.

However, if one looks at this fact in light of recent market research findings from one of the big four audit firms, it gives a different perspective. The research reveals that majority of the Telcos not equipped with enough tools or industry best practices to assess the CAPEX spends on projects, evaluate ROI for each such investment and perform sustainable capital allocation. This is a surprising revelation. It simply means that many Telcos are servicing on-going CAPEX without rigorous assessment on actual RoI vs planned RoI, are not taking forward lessons learned from previous CAPEX cycle. Even the Telcos who do have rigorous processes, right incentive structure, accountability of results etc. actually misses a critical point.

What Telcos underestimate?

The critical point is – generally the assets, especially the network assets are viewed from monetary value perspective only in this whole CAPEX scheme of things. The value that can be derived from un-lit or under-used network asset capacities for the CAPEX planned is not given deserved thought or action. This is because of the fundamental reason that financial and network data of assets are lying in silos. This data is never used together to gather useful insights to put the network assets to sweat to furthest possible aligning with ever growing network demand and broader strategic CAPEX – RoI goals. Telcos can do more with their data. It would require collaborative efforts with right partner to unleash the power residing underneath the siloed systems.

Sai Thilak

Sai Thilak has 11+ years of experience in engineering management, product development, solution architecting and customer deliveries in Telecom OSS/BSS space. Sai currently leads product management for Network Asset Assurance & Data Integrity Management products. He’s passionate about new age products, a voracious reader, biography & history buff, financial market student, cricketer & active blogger.

Introducing ROC Asset Assurance

Your network has a story to tell you about wasteful Capex practices which are likely reducing your Return on Capital.   If you are like most Operators, you may not be listening.

Much of the Telecom Industry’s recent focus has been placed on CEM and related analytics.  Certainly, customer acquisition and retention programs are critical as these drive revenue.   Network augments and migrations to new technologies are an unavoidable “price to pay” and the lion’s share of management’s attention is placed on squeezing as much revenue traffic onto pipes and spectrum as possible.

Trouble is, EBITDA margins are being squeezed for reasons that I’m sure you are all too familiar with.  Amongst many Operators with whom Subex has spoken recently, there is a growing recognition that network costs must be better managed, but also a frustration that lack of visibility and insights undermine the ability to do so.

As I said, your network has a story to tell you—in fact, many stories.  What’s more, it will give you critical information that your ERP or Asset Tracking system simply can’t.  Without this information, your ability to optimize Capex throughout the asset lifecycle can be significantly eroded.

Can you answer:

Where are my assets?

ERPs are important for managing vendor relationships, driving supply chain process and tracking warehouse inventory. Once an asset leaves the warehouse, responsibility for tracking and managing the asset typically shifts to technical OSS’s (e.g. Network Inventory).  Data quality within technical OSS’s is notoriously poor.  As a result, assets can become stranded, under-utilized and/or lost.   Consequently, Operators spend Capex that could otherwise be avoided if existing assets were effectively harvested and redeployed.

 

The Asset Lifecycle and Relative Positioning of ERPs vs. Technical OSS

When are my assets generating returns?

A critical capital management objective is minimizing the cash-cash cycle.  This is the interval between paying cash to a vendor, and receiving cash from a customer once an asset becomes productive (i.e. carries revenue traffic).   Each extra day in the cycle increases your cost of capital.  Reducing the cycle requires that you know the answer to:

  • How much time elapsed from the purchase of an asset until deployment in the network?
  • How much time elapsed from deployment of the asset until it became productive?

Equipped with such time-to-value analytics, finance can better hold Network Operations accountable for any excessively long intervals.  Network Operations also has the actionable information it needs to identify and correct inefficient deployment and service delivery processes.

Where did my assets go?

A very common dysfunction is mismanagement of assets once they are decommissioned or retired.  Some assets remain powered but unproductive, contributing to excessive energy costs.  Others simply disappear (whether moved, shelved or pilfered) and are no longer available for re-provisioning or salvage.  A recent PwC survey found that “one half of wireline operators and over one-third of wireless operators indicated that less than 50% of their assets are currently catalogued and managed.”  Network Intelligence enables Operators to track movement of assets in the network and provides an early alert when an asset has been removed and does not reappear elsewhere.

What assets do I need?

A critical component of avoiding unnecessary Capex is having accurate and timely Network Intelligence to guide the budgeting, forecasting and planning process.  This is especially important for portions of the network which are most sensitive to traffic growth.  It is essential to monitor resource utilization and equip planners with metrics and trending to ensure assets are purchased when needed, where needed and for the right purpose.

Introducing ROC Asset Assurance

Drawing on our industry leadership in Data Integrity Management, Capacity Management, Network Discovery and Analytics, Subex is launching ROC Asset Assurance to harness Network Intelligence throughout the asset lifecycle and do for Asset Assurance what Subex has famously done for Revenue Assurance and other business optimization areas.   Look for more exciting details on ROC Asset Assurance in the days and weeks to come.

Director of Business Development for Network Analytics
Andy has 20+ years of experience in engineering management, business operations and IT, primarily with Tier 1 operators including Level 3, MCI and GTE. His responsibilities included leading IT development teams that built mission-critical network management, provisioning and inventory systems with thousands of users. Prior to joining Subex, Andy was a Senior Manager overseeing a Data Governance organization at a major Internet Services provider. Andy graduated from the University of Pennsylvania with degrees in Electrical Engineering and Economics (Wharton). He holds an MBA from the University of Colorado.

Traditional Capacity Management is doomed to fail and cost CSPs millions in unnecessary CapEx!

Most CSPs today adopt a traditional capacity management approach that consists of planning their network resource requirements over the next 12 months based on past consumer trends.

Reality check! In today’s fast paced end-user consumption and service demand, trying to predict resource needs 12 months out based on past end-user behavior is like playing a lottery based on past outcomes in hopes to hit it big – More often than not you will lose big time.

The reality is that the past doesn’t predict the future anymore and that end-users are causing unpredictable shifts in resource consumption in the network as they tune into major events and build their life around real-time communications. Oh sure, many CSPs will read this and think, we have the latest probes in the network giving us loads of real-time data and complex flows where we know if packets are traveling left or right in the network. And yet with all this information CSP still can’t keep ahead of today’s data tsunami, without being concurrently choked by escalating CapEx. Having loads of low-level information more often than not causes data overload: You have so much raw data that you don’t know what it means from an overall congestion perspective without weeks or months of analysis.  Or even worse, you may interpret trends differently depending on the data sample you examine, making it virtually impossible to project congestion and business impacts. Many CSPs with whom I have spoken face the same problem: When in doubt, pour more CapEx into the network, in the hope of adding the right resources to alleviate congestion.

What if there is a way to more precisely target the CapEx spend needed in the network, to deliver the services the CSPs need to thrive?  In fact, there is, and it’s called “Real-time Capacity Analytics”!

Real-time Capacity Analytics is about understanding all capacity-related data rather than looking at it on a per attribute or device perspective – which provides little more clarity than just a blip in an ocean of traffic – instead looking at capacity consumption as it relates to end-to-end path and services to end-users. It is amazing how CSPs are concerned about how capacity congestion affects their subscribers and yet most solutions today fail to look at capacity from an end-to-end end-user perspective. Without an end-to-end view and understanding of how different segments of the network path and services affect congestion, CSPs may be spending CapEx in portions of the network that may temporarily relieve the symptoms of congestion rather than resolving the root cause.

So as a CSP, the next time you face customer impact based on congestion, ask yourself: Did I see it coming? Did I get the right warning signs that congestion was building up over time? Did I get a read of time to exhaustion that could have helped me plan added capacity before impacting my customers? Is my solution pinpointing where to target my Cap Ex? And finally, do I have a solution that can tell me if my network can accommodate new subscribers or services, and, if not, where will the congestion hot-spots occur and how much Cap Ex is needed?

If your current solution isn’t helping you answer any of the above questions, it is time to consider Real-Time Analytics for Capacity Management before your business gets swept away by the tides of capacity congestion.

A Thorn in the Side? – Handling Over-the-top Content Demands

As I interact with more and more service providers about their network capacity issues, I’ve become sure about one thing – what worked before, isn’t really working anymore.  The CapEx requirement for network equipment just to keep up with the exponential growth in data traffic (i.e., Data Tsunami) is still not getting them ahead of significant congestion issues and customer impacting events.  Why? Traditional capacity management paradigms are not working.

Essentially, feedback from carriers of all sizes and types has exposed one of the most significant shifts in thinking regarding how to go about managing and planning for network capacity.  They know that the rules are all changing and today’s content demands are outpacing the CSPs ability to keep pace.  The first key question is how to get back in front of the capacity demand (we’ll talk about monetization next…stay tuned).  So, why aren’t today’s processes scaling?

  • CSPs use a multitude of human resources and manual processes to manage network capacity.   This may have scaled under slower and more predictable capacity growth curves, but thanks to services like You-Tube & Netflix, entire network capacity is shifting in quantum leaps.
  • Solutions provided by equipment vendors are often platform specific, and reinforce a silo approach to Capacity Management when a holistic view is needed.  Service demand congestion is a network phenomenon which doesn’t care about individual equipment vendors or devices.
  • CSP planning groups leverage data and make decisions based on systems which have 20 – 40% inaccuracy in comparison to the actual capacity availability in the network.
  • Today’s CSP solution approach is often homegrown where 90% of the time is spent on acquiring and understanding raw data.  As a whole, everyone is trying to answer the question of how to proactively eliminate the possibility of congestion, but most are still focused on addressing the symptoms and not preventing the problem

It is surprising to note that even top tier/technology leaders cannot accurately predict where and when capacity issues will impact their networks.  This lack of visibility hurts CSPs considerably because as per our own studies, network events are behind can account for up to 50% of customer churn in high value mobile data services.

And the Capacity Management problem doesn’t really end there; in many ways it’s like a supply chain process. Marketing owns the function of forecasting where service uptake will drive capacity needs across the network. When Marketing underestimates service uptake, there is a real and significant impact to potential revenue: On average, it can take about 3 months from when capacity is fully tapped in a Central Office (CO) to when new capacity can be added to your network.  During that time, customers expecting service availability become hugely frustrated and begin to churn.  Engineering groups are pushed into panic-mode, trying to react as fast as possible – often putting capacity in the wrong places due to inaccurate data – resulting in further congestion, service degradation, an inefficient use of capital.

The message from CXO’s is crystal clear – there is an urgent and dire need to find new ways of monetizing the data crossing their networks. This need is exacerbated with OTT content and net-neutrality. SLA and authentication based revenue models are absolutely dependent on knowing what types of content/services are traversing your network, how much capacity they consume, and how utilization is driven by your consumer’s interests and activities.  This type of analysis requires a critical and intelligent binding of network and services data with business data to truly assess the financial impact to the CSP. Many Business Intelligence (BI) solution leaders will lay claim to abilities here, but actually fall very short of the mark.  Instead, real experience suggests that solutions in the marketplace today either:

  • Can handle the financial aspects of your business but have no understanding of today’s network dynamics in terms of capacity issues and services;
  • Can handle parts of your network very deeply, but do not correlate or provide a holistic view at the service level; or,
  • Can collect some network and service level information, but have no ability to incorporate business data to understand the impact to the business – i.e,. cost, subscriber behavior, propensities

All the above challenges bring us to the inevitable question – what kind of approach does one take in order to tackle capacity management issues? How does one stop chasing traffic and focus on flattening the CapEx curve instead? In order to attain ‘Capacity Management Nirvana‘, a proactive and scalable approach needs to be adopted by CSPs. An approach which not only intelligently binds network and business strategies based on the Data Tsunami realities but also brings proactive and predictive capacity management to the table. At the end of the day, a CSP should have access to all their capacity, the ability to leverage real and immediate feedback on the change in capacity as service uptake increases, and finally, the right tools and intelligence to get in front of what’s coming.

To know more about how a Capacity Management solution can help you address the above issues, download the whitepaper “Energizing Smart Growth with Network Intelligence

Angeline MacIvor started her career at Nortel Networks in the optical domain, and gradually migrating over to the world of network software, with successful tenures at MetaSolv (now Oracle), Syndesis and now Subex Limited. Angeline has been working with key operators in Canada in the US for 17 years, often winning awards for solution innovation in response to customer needs. Angeline is a key driver behind Subex’s capacity management program.

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