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

7.3.6. CAPEX Computations

In this example, CAPEX contributions to the differential cash flow are computed by direct comparison between an ideal SON functionality that executes error-free capacity planning and a manual process that involves errors as described in Section 7.3.3. Applying the methodologies and models described throughout this chapter, for every year i, the differential cash flow component due to a more rational CAPEX allocation process, CF_CAPEX(i), is computed as:
CF_CAPEX(i) =
(7.10)
= CostCarrier * (AManual(i) − ASON(i) )
where Cost_Carrier is the monetary cost per additional carrier equipment; A_SON(i) is the amount of additional carriers that would be installed in the network during year i for the case in which a perfect SON function is available to carry out this process without any errors; and A_Manual(i) is the equivalent number when capacity planning is assumed to be done manually (according to the process described in Section 7.3.3).

7.3.7. OPEX Computations

In this example, the OPEX savings associated with SON can be structured around two main categories that are totally cumulative: (i) lower annual fees for leased E1 links through a more rational process to decide on their activation; and (ii) lower workload through automation.

7.3.7.1. Lower Annual Fees for Leased Transmission Lines

This calculation follows the same process as the one described for the computation of the individual CAPEX contributions to the annual cash flow. As already stated, the only difference is that leased transmission lines constitute an annual recurring cost, i.e. they are not paid for only once. Thus, every year, the calculation for each one of the methodologies (manual planning or SON) needs to consider all the installed leased lines, no matter whether they were installed that year or during previous ones.

Figure 7.11 Assumed traffic patterns for voice and data.
Applying the methodologies and models described along this chapter, for every year i, the differential cash flow component due to more rational leased line installation process CF_OPEX,links(i) is computed as:
CFOPEX,links(i) = CostLink * (LManual(i) − LSON(i) ) (7.11)
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 a perfect SON function is available to derive the amount of required links without any errors; and L_Manual(i) is the equivalent number when capacity planning is assumed to be done manually (according to the process described in Section 7.3.3).