Techno-economic analysis of open RAN deployment scenario: in the case of Ethiotelecom
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Date
2023-09
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Addis Ababa University
Abstract
The telecommunications industry is characterized by the collaboration of multiple vendors to provide
mobile network communication services. However, the heterogeneous integration of hardware and
software from multiple vendors presents a considerable challenge. Hence, operators typically rely
on a single vendor for their radio access network (RAN) requirements. Furthermore, the increasing
demand for data services adds to the complexity.
In response to these challenges, the introduction of open Radio Access Network (Open RAN) emerges
as a solution, offering an ecosystem that is open, flexible, intelligent, efficient, and cost-effective. In
the context of Ethiotelecom, an assessment of the viability of implementing Cloud RAN incorporating
Layer 1 (L1) and Layer 2 (L2) functionalities alongside the physical network function (PNF) and the
virtualization of Layer 3 (L3) functionalities has been conducted. In C-RAN the HW components and
SW are all proprietary. This study focuses on the virtualization of all baseband functionalities and
based on open RAN COTs HW and SW.
This thesis assesses the viability of deploying Open RAN network architecture in Addis Ababa,
Ethiopia. A thorough techno-economic analysis (TEA) with a study period of five years was conducted
by using modified TERA model. The analysis encompassed an investigation of deployment
scenarios of Open RAN Distributed Unit (DU) pooling to edge cloud and Central Unit (CU) pooling
to regional cloud. The selection of optimal locations for vDU and vCU components entailed an array
of factors, including available bandwidth, fiber accessibility, and latency considerations. Inputs such
as cell site data, network configurations, hardware-software specifications, and financial parameters
were used.
The analysis involved network dimensioning, cost modeling and assessing using economic metrics
for each architecture. Metrics such as Net Present Value (NPV), Payback Period (PP), and Internal
Rate of Return (IRR) were employed as decision-making tools. These metrics were computed using
MS-Excel and MATLAB. The results indicate that D-RAN was more favorable than Open RAN, with
PP of 2.4 and 3.5 years, respectively because D-RAN CAPEX cost of initial investment are taken
by considering depreciation rate of RAN component. Also both architectural approaches exhibited
positive NPV and IRR that exceeded the assumed discount rate of 10%. The findings of this study
indicate the profitability of existing RAN architecture within the study period.
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Keywords
RAN, Open RAN, virtualized RAN, TERA model, TEA, Cost modeling