Return on Investment (roi) for Multi-Technology son juan Ramiro, Mark Austin and Khalid Hamied

7.4.6. CAPEX Computations

In this case, there are three different CAPEX components to be taken into consideration: new carriers, new capacity sites and new RNCs. For each year i, the differential cash flow component due to CAPEX savings due to capacity increase, CF_CAPEX(i), can be written as:
CF_CAPEX(i) =
= CostCarrier * (AManual(i) − ASON(i) ) +
+CostSite * (SManual(i) − SSON(i) ) + (7.24)
+ Cost_RNC ^* (RNC_Manual(i) − RNC_SON(i) )
where Cost_Carrier, Cost_Site and Cost_RNC are the monetary costs per additional carrier equipment, capacity site and RNC, respectively; A_SON(i), S_SON(i) and RNC_SON(i) stand for the amount of additional carriers, capacity sites and RNCs that would be installed in the network during year i when Self-Optimization processes are applied; and A_Manual(i), S_Manual(i) and RNC_Manual(i) are the equivalent magnitudes when no Self-Optimization processes are applied. For this exercise, the costs per carrier, capacity site and RNC are assumed to be constant with time. For more details about the way to compute the need for capacity expansions due to traffic growth, see Section 7.4.4.

7.4.7. OPEX Computations

As compared with Self-Planning, in this case, the only considered component is the lower annual fees for leased transmission lines. At high level, the way to compute this cash flow component is similar to the one described in Section 7.3.7.1. However, in that case the reason for the OPEX savings was the application of a more accurate capacity planning process that avoided over-dimensioning, whereas in this case the reason behind these savings is the application of load balancing techniques between NodeBs that increase the trunking efficiency of the system and therefore reduce the need for extra E1 links as traffic grows. As already described in Section 7.4.2, this is modeled mathematically by means of a reduction in the standard deviation of the per sector traffic distribution, i.e. by narrowing the distribution and therefore reducing the percentage of NodeBs requiring a higher number of E1 links. Thus, the differential cash flow component due to Self-Optimization, CF_OPEX,links(i), is computed as:
CFOPEX,links(i) = CostLink * (LManual(i) − LSON(i) ) (7.25)
where Cost_Link is the annual cost per installed transmission link (per E1 in this specific case); L_SON(i) is the total amount of links (E1 links in this case) that are being operated in the network during year i (no matter whether they were installed that year or during the previous ones, since they are assumed to be leased lines and therefore imply annual, recurrent payments) for the case in which Self-Optimization is applied; and L_Manual(i) is the equivalent number when such techniques are not utilized. For this exercise, the annual cost per link is assumed to be constant in time.