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Three-indicator model creates a "compass" for investment value

2015.05.01 By Zhao Jun

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Huawei's "Three-indicator model" effectively links network returns, network quality and user perceptions to better illustrate a network's features, enabling more targeted investment strategies through a sort of "compass" for investment value.

After completing a large-scale network deployment, a telco's investment policies inevitably return to balancing investment against reasonable returns. The key considerations become, "How can we effectively increase return on investment (ROI), improve equipment utilization, and enhance customer experience using a certain amount of investment?"

Huawei's Three-indicator model addresses telco needs by helping identify a network’s relevant features and formulating reasonable, customized investment strategies by associating network returns, network quality, and user perceptions, allowing each carrier to build their own "compass" for investment value.

There are three stages involved in Three-indicator implementation – network segmentation, three-dimensional quantification, and grid classification and policy creation.

The Three Indicator Model

Network segmentation by region

First, telco networks are divided into sub-networks and grids by scenario (residential areas, shopping malls, commercial districts, etc.), administrative area, and site distribution.

3D analysis

This step entails efficient linking of wireless data, PS core network data, operational DPI data and multi-vendor data to quantify a network's performance in three dimensions – network returns (CS voice traffic, data traffic, etc.), network quality (Ec/Io, RSCP, etc.), and user experience (speed, latency, etc.). A network's "high-performance features" are marked in red, and are known as level A (Figure 3); its "medium-performance features" are marked in blue, and are known as level B; while its "low-performance features" are marked in green, and are known as level C. Mapping that leverages this can clearly illustrate a telco’s network.

Grid classification and policy creation

This last step involves placing the 3D (network returns, network quality, and user perception) results onto a coordinate axis, which is divided into nine quadrants classified by color as shown in Figure 3. In Quadrant I, network returns are high and network quality is good, so most attention should be paid to user experience. In Quadrant II, benefits are high but network quality is only average, so sustained network quality improvement is required. In Quadrant III, benefits are average, network quality is fairly good, and there is still spare network capacity, so regional potential hasn't been fully exploited. Finally, in Quadrant IV, benefits and network quality are both only average, and regional characteristics must be considered when formulating an investment strategy. Investment strategies for each of the four network types are displayed in Table 1.

The Three-indicator model can be used during both network planning and operations. During planning, this model helps telcos build value investment-oriented strategic maps. During operations, the use of color-coded quadrants for both pre-operational assessment and post-operational evaluation allows for effective network development measurement and timely adjustment of investment strategies.

Huawei's Three-indicator model has already been successfully put to use by telcos in many countries. This includes extensive use in more than ten medium-sized and large cities by China Unicom, where it has aided the rapid development of the operator’s 3G business and the establishment of its LTE investment strategy. Huawei's Three-indicator model is an invaluable tool for telcos in the joint, customized establishment of a "compass" for investment value and refined operations, and for obtaining optimum profitability from their networks.

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