Techno-Economic Analysis of Cloud RAN Deployment Scenarios: In the Context of Ethio Telecom
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Date
2022-01
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Addis Ababa University
Abstract
The explosive mobile traffic growth, as well as rapid deployment of innovative wireless technologies
and services, have all put significant strain on network capacity in the radio access
network (RAN). Mobile network operators (MNOs) are considering Cloud-based RAN deployment
to address this capacity challenge while improving cost, energy usage, deployment
flexibility and network management. Efficient deployment of Cloud RAN requires selecting
suitable deployment scenarios and a thorough understanding of both its technical and economic
aspects in the context of the RAN service area. Such techno-economic study has not
been undertaken in the context of Addis Ababa, Ethiopia and it is required to scientifically
understand viable deployment of RAN architecture in Addis Ababa.
In this thesis work, potential Cloud RAN deployment scenarios are formulated using scenario
planning method. For selected scenarios in the context of Addis Ababa, a thorough technoeconomic
analysis is performed applying a modified TERA framework that includes marketing
forecast, network dimensioning, cost modeling, revenue modeling and economic analysis.
The analysis is performed using net present value (NPV), internal rate of return (IRR) and payback
period (PP) economic metrics that are obtained from its implementation in MS-Excel and
MATLAB. For the analysis, we assume a 6 years study period and a 10% discount rate.
Achieved results show traffic growth forecasts have a great impact on Cloud RAN economic
benefits that in turn affect the rate of return on investment. In scenario 1 with low traffic
expectation, centralized RAN architecture shows a better cost position than Cloud RAN and
distributed RAN (D-RAN) with a payback period of 2.94, 3.04 and 3.14 years respectively.
However, for small scale deployment under a high traffic growth scenario, Cloud RAN architecture
becomes the most cost-efficient architecture with all economic indicators as shown
by the result. In this scenario, the payback period for Cloud RAN, Centralized RAN, and DRAN
is 3.5, 3.95 and 4.16 years respectively for Addis Ababa. Regarding NPV and IRR, all
architectures have positive NPV for the study periods and greater IRR value than the defined
discounted rate. The results indicate that Cloud RAN achieved significant cost benefits under
a high traffic growth scenario.
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Keywords
LTE, 5G, RAN, Cloud RAN, Virtualization, TERA Model, Cost Modeling, Techno-economic Analysis