Point-to-point (PTP) replacement network
the business case for
replacing a point-to-point
network with VectaStar
Introduction
VectaStar offers the lowest
per-E1 OPEX cost of any of the available backhaul
technologies.
Operators replacing conventional Point-to-point
backhaul networks with VectaStar networks are experiencing savings of
60% of their OPEX costs.
NPV of VectaStar saving
When building a high density (urban) backhaul network, the increased density of cell sites presents a logistical problem for a traditional point-to-point network.
A point-to-point network requires two radios for each link. For a network with a given number (n) of links, a point-to-point network requires 2n radios for each link, each with an annual site rental fee. In a very high density network it may be physically impossible to install sufficient PTP antennas to serve the network.
Immediately, a VectaStar PMP network saves CAPEX. For a given number (n) of links a VectaStar point-to-multipoint network requires n+1 radios — almost half that of a point-to-point network. A reduction in the number of radios reduces annual site rental fees and simplifies installation.
Point-to-point replacement business case
Consider a network operator using PTP radios for cellular backhaul with a rapidly expanding bandwidth requirement driven by a higher percentage of revenues coming from data services. In year one, 600 new sites are to be connected, with a steady growth of 400 sites per year to cover new HSPA sites and network expansion.
The business case for a PMP backhaul network is strong enough that the OPEX saving alone covers 70% of the PMP CAPEX and if both CAPEX and OPEX are considered, $16 million is saved in year one alone.
Network parameters
In the first year, 600 new sites are connected, with a steady growth of 400 sites per year to cover new HSPA sites and network expansion.
OPEX and CAPEX comparison
| Annual parameters | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| New links | 600 | 400 | 400 | 400 | 400 |
| Total links | 600 | 1000 | 1400 | 1800 | 2200 |
| VectaStar CAPEX ($M) | 10.6 | 7.2 | 7.2 | 7.2 | 7.2 |
| PTP CAPEX ($M) | 20.7 | 13.8 | 13.8 | 13.8 | 13.8 |
| VectaStar OPEX ($M) | 4.0 | 6.7 | 9.2 | 12.1 | 14.6 |
| PTP OPEX ($M) | 10.7 | 17.8 | 25.1 | 32.1 | 39.2 |
| Saving using VectaStar ($M) | 16.7 | 17.9 | 22.3 | 26.8 | 31.2 |
| Saving using VectaStar (pv $M) | 16.7 | 16.0 | 17.8 | 19.1 | 19.9 |
| Saving using VectaStar (npv) | $M 16.7 | $M 32.6 | $M 50.4 | $M 69.4 | $M 89.2 |
Notes
pv: present value
npv: net present value (cumulative)
References
Network operators who have evaluated the VectaStar business case for their specific requirements and have chosen to use VectaStar instead of PTP include Maxis Communications, Malaysia, who use VectaStar for HSPA backhaul; Vodacom Tanzania, who use VectaStar to backhaul HSPA and WiMAX access networks, and MTN Rwanda and MTN Cameroon.
- Where next
- Business case
- PTP replacement
- Leased Line replacement
