Transcript Telecommunication networks

Series of lectures
“Telecommunication networks”
Lecture#08
Analysis in the field of
telecommunications
Instructor: Prof. Nikolay Sokolov, e-mail: [email protected]
The Bonch-Bruevich Saint-Petersburg State
University of Telecommunications
Network development (ITU)
OSS – operational support system, SLA – service level agreement.
Main directions of analysis
1. Forecasting
2. Network structure
3. Quality of Service (QoS)
4. Traffic engineering
5. Economic analysis
Forecasting: foreword
Forecasting is the process of making statements about events
whose actual outcomes (typically) have not yet been observed.
A commonplace example might be estimation of the expected
value for some variable of interest at some specified future
date. Prediction is a similar, but more general term.
An important, albeit often ignored aspect of forecasting, is the
relationship it holds with planning. Forecasting can be
described as predicting what the future will look like, whereas
planning predicts what the future should look like. There is no
single right forecasting method to use. Selection of a method
should be based on your objectives and your conditions (data,
etc.).
Source: http://en.wikipedia.org/
“Inaccurate” Predictions
“This ‘telephone’ has too many shortcomings to be seriously
considered as a means of communication. The device is
inherently of no value to us”
Western Union internal memo, 1876
“I think there is a world market for maybe 5 computers”
Thomas Watson, Chairman of IBM, 1943
“There is no reason anyone would want a computer in their
home ”
Ken Olson, President, Chairman & Founder
Digital Equipment Corporation, 1977
“640K ought to be enough memory for anybody”
Bill Gates, Microsoft, 1981
Conclusion: “Prediction is very difficult, especially if it's about
the future“. (Niels Bohr, Nobel Prize in Physics in 1922.).
Main considerations
One of the reasons of qualitative network development is the
interest of the group of subscribers which brings in a good return
to Operator in new kinds of services. A number of requirements of
this subscriber's group stimulate radical changes in different
components of telecommunications network. At present time, the
most essential changes take place in access networks. It is
desirable that qualitative changes were recognized during the
development of forecasts. These results are necessary for the
choice of rational principles of further telecommunication system
development.
Different methods are being applied during the process of
telecommunications networks planning. Method selection is
carried out taking into consideration problem definition, character
of the considered process, and available statistic information.
Unexpected surprise
Number of PSTN subscribers
100%
F1(t)
F2(t)
F(t)
F3(t)
Time
T0
T1
T2
Formalized forecasting methods
Formalized forecasting methods are effective in the cases when prehistory of studied process
is known well. At present time, majority of forecasts is carried out with the help of methods
of extrapolation and expert judgments. Each of these two methods is realized in different
ways. Selection of the method depends on the studied process and the problem put by.
Example of forecasting of two processes represented with functions F1 (t ) and F2 (t ) is shown
on the figure. It is assumed that statistical data cumulated during period of time [tr , t0 ] allow
determining of analytic expressions for the functions F1 (t ) and F2 (t ) . Statistical data are
depicted by squares on the segment [tr , t0 ] .
Problem put by comes to the calculation of values of these functions for the forecasting
period – [t0 , t f ] . Corresponding trends are depicted by dotted lines. Besides, it is expedient to
estimate confidence intervals. On the figure they are shown for the function F2 (t ) by dashdot lines.
Complication of the forecasting development, in addition to problems with reliability of
necessary statistical information, is explained by the circumstances of this kind:
 Some kinds of new services are so specific, that it is very hard to select adequate
analogues for their forecasting;
 To a number of infocommunication market segments (mobile network is a typical
example) development processes which essentially differ from the tendencies,
thoroughly studied by Operators of other countries, are peculiar.
Two examples of trend extrapolations
Extrapolation of trends
F2(t)
Trends for functions F1(t), F2(t)
F1(t)
Time
tr
t0
tf
Forecasting of the future and the past
Behavior of the investigated process for three ensembles
F(t)
Year
0
1
2
3
{X1}
4
5
6
7
8
{X2}
9
10
11
12
{X3}
13
Forecasting related to access networks
Number of households, millions
40,0
30,0
Narrow band lines
60%
20,0
10,0
Only mobile
20%
Only broadband
Year
0,0
2002
2007
2012
Generalization (1)
Forecasting can be broadly considered as a method or a technique for estimating
many future aspects of a business or other operation. There are numerous
techniques that can be used to accomplish the goal of forecasting. For example, a
retailing firm that has been in business for 25 years can forecast its volume of
sales in the coming year based on its experience over the 25-year period—such a
forecasting technique bases the future forecast on the past data.
While the term "forecasting" may appear to be rather technical, planning for the
future is a critical aspect of managing any organization—business, nonprofit, or
other. In fact, the long-term success of any organization is closely tied to how
well the management of the organization is able to foresee its future and to
develop appropriate strategies to deal with likely future scenarios. Intuition, good
judgment, and an awareness of how well the economy is doing may give the
manager of a business firm a rough idea (or "feeling") of what is likely to happen
in the future. Nevertheless, it is not easy to convert a feeling about the future into
a precise and useful number, such as next year's sales volume or the raw material
cost per unit of output. Forecasting methods can help estimate many such future
aspects of a business operation.
Source: Reference for Business. Encyclopedia of Small Business, 2nd edition.
Generalization (2)
Suppose that a forecast expert has been asked to provide estimates of the sales
volume for a particular product for the next four quarters. One can easily see
that a number of other decisions will be affected by the forecasts or estimates
of sales volumes provided by the forecaster. Clearly, production schedules,
raw material purchasing plans, policies regarding inventories, and sales quotas
will be affected by such forecasts. As a result, poor forecasts or estimates may
lead to poor planning and thus result in increased costs to the business.
How should one go about preparing the quarterly sales volume forecasts? One
will certainly want to review the actual sales data for the product in question
for past periods. Suppose that the forecaster has access to actual sales data for
each quarter over the 25year period the firm has been in business. Using these
historical data, the forecaster can identify the general level of sales. He or she
can also determine whether there is a pattern or trend, such as an increase or
decrease in sales volume over time. A further review of the data may reveal
some type of seasonal pattern, such as peak sales occurring before a holiday.
Source: Reference for Business. Encyclopedia of Small Business, 2nd edition.
Main directions of analysis
1. Forecasting
2. Network structure
3. Quality of Service (QoS)
4. Traffic engineering
5. Economic analysis
Network structure. Some definitions
Network structure
Term is used to describe the method of how data on a
network is organized and viewed.
Network architecture
Also referred to as the network model, the network
architecture is the overall structure of how a network is
laid out. The network architecture is commonly drawn out
as a diagram for a visual representation of the overall
network. A well designed network architecture helps
prevent network bottlenecks and various other issues.
Some authors use term “topology” instead of the word “architecture”
because term “architecture” is widely applied in the publications
concerning telecommunication protocols.
Examples for the graph with six nodes
a2
a2
a3
a3
a1
a1
a4
a4
a6
a6
a5
b) Tree
a) Star
a2
a2
a3
a1
a1
a5
c) Ring
a3
a4
a4
a6
a5
a6
a5
d) Full mesh
Oriented, unoriented and mixed graphs
a2
a1
c23
a4
a6
l23
a2
a3
a2
a3
a4
a) Oriented graph
a6
a5
b) Unoriented graph
a1
l
l
a3
a2
l
a5
c) Mixed graph
Example of finding the Steiner point
l
3
a3
a4
a6
a5
r23
Change of the access network structure
TS1
TS2
l
l
1
CO
l
TS4
TS1
TS2
R1
x
1
2
L
CO
L
x
2
2
R2
1
4
L
3
l
3
R3
TS4
TS3
x
TS3
3
a) Access network without remote modules
b) Access network with remote modules
Two variants of the ring
network construction
a2
a2
a3
a3
a1
a1
a4
a4
a6
a5
a) First structure of transport network
a6
a5
b) Second structure of transport network
Access network modernization
Distribution cables
Distribution cables
Distribution cabinets
X1
Lin
inets
b
a
c
een
w
t
e
b
e
Ma
in
cab
les
X2
Main distribution frame
Example of the several rings creation
7
2
5
11
∞
∞
9
4
12
1
6
8
10
3
0
Transformation of the
optimization problem (1)
Ring I
Ring I
TS
TF
Ring II
Ring III
Subscript “s” – start, subscript “f” – future
Ring II
Transformation of the
optimization problem (2)
F(z)
Example of the
“stable solution”
 max
A1
– P12
A2
A3
+P23
– P34
+P01
– P56
A5
A6
+P45
A4
 min
z1
z2
z3
z4
z5
z6
z7
z
Transformation of the
optimization problem (3)
p7 << p5
a2
a2
a5
TX
a1
a3
ed
et
el
a3
D
a1
g
ed
e
p6 → 1
a4
a7
a6
a4
P7 → 0
Average length of line
l  0,376 S
l  0,383 S
l  0,379 S
a) Circle
b) Square
c) Regular hexagon
l  0,41 S
l  0,43 S
l  0,488 S
d) Ellipse with ratio
between axes 2:1
e) Rectangle with ratio
between sides 2:1
f) Equilateral triangle
Main directions of analysis
1. Forecasting
2. Network structure
3. Quality of Service (QoS)
4. Traffic engineering
5. Economic analysis
Definitions
In the Recommendation E.800 and in a number of other ITU-T documents
several similar definitions of the term "Quality of service" are formulated:
1. Totality of characteristics of a telecommunications service that bear on its
ability to satisfy stated and implied of the user of the service (E.800).
2. The collective effect of service performance which determine the degree of
satisfaction of a user of a service. It is characterised by the combined aspects of
performance factors applicable to all services, such as; - Service operability
performance; - Service accessibility performance; - Service retain ability
performance; - Service integrity performance; and - Other factors specific to
each service (Q.1741).
3. The collective effect of service performances which determine the degree of
satisfaction of a user of the service (Y.101).
4. The collective effect of service performance which determine the degree of
satisfaction of a user of a service. It is characterized by the combined aspects
of performance factors applicable to all services, such as bandwidth, latency,
jitter, traffic loss, etc (Q.1703).
Dynamics of speech quality
The "Quality of service" paradigm is constantly changing. New quality of service
indices appear. Subscribers’ requirements change. Data related to the speech
quality rating is shown in the table. Quality acceptable for subscribers is
compared to the talk of two persons positioned on a certain distance from each
other.
Type of connection
in PSTN
Local
Long-distance
Equivalent distance during normal talk, m
1923 1933 1950 1985
Optimal
14
8.3
3.5
2.0
Comfort
distance
25
11.7
5.0
2.0
Estimates for the latter decades are absent, but general tendency is obvious. By
implication it is confirmed by at least two factors. Firstly, many communications
Administrations, basing only on results of research, reduce the value of
admissible attenuation of speech path between telephone terminals. Secondly,
some subscribers began to use telephone communications service in the 7 kHz
band. Signal coding in this band is carried at the 64 kbit/s speed.
Recommendation ITU-T E.800 (1)
Recommendation ITU-T E.800 (2)
Recommendation ITU-T E.800 (3)
Recommendation ITU-T E.800 (4)
Recommendation ITU-T E.800 (5)
Recommendation ITU-T E.800 (6)
Main terms (1)
1. Quality. The totality of characteristics of an entity that bear on
its ability to satisfy stated and implied needs. Note – The
characteristics should be observable an/or measurable. When
the characteristics are defined, they become parameters and
are expressed by metrics.
2. Service. A set of functions offered to a user by an organization
constitutes a service.
3. Item (entity; element). Any part, device, subsystem, functional
unit, equipment or system that can be individually considered.
4. User. A person or entity external to the network, which utilizes
connections through the network for communication.
5. Customer. A user who is responsible for payment for the
service.
Main terms (2)
6. Service accessibility performance. The ability of a service to be
obtained, within specified tolerances and other given conditions,
when requested by the user.
7. Service integrity performance. The degree to which a service is
provided without excessive impairments, once obtained.
8. Network performance. The ability of a network or network portion
to provide the functions related to communications between users.
9. Trafficability performance. The ability of an item to meet a traffic
demand of a given size and other characteristics, under given internal
conditions.
10. Dependability. Performance criterion that describes the degree of
certainty (or surety) with which the functions is performed regardless
of speed or accuracy, but within a given observation interval.
Main terms (3)
11. Service integrity performance. The degree to which a service is
provided without excessive impairments, once obtained.
12. Network performance. The ability of a network or network portion
to provide the functions related to communications between users.
13. Trafficability performance. The ability of an item to meet a traffic
demand of a given size and other characteristics, under given internal
conditions.
14. Availability. The ability of an item to be in a state to perform a
required function at a given instant of time or at any instant of time
within a given time interval, assuming that the external resources, if
required, are provided.
15. Reliability performance. The ability of an item to perform a
required function under given conditions for a given time interval.
Main terms (4)
16. Transmission performance. An indication of a communication
signal at the egress of network compared to its performance at the
ingress to the network. The indication of performance is expressed by
a choice of pertinent parameters for the application or service in
question.
17. Propagation performance. The ability of a propagation medium,
in which a wave propagates without artificial guide, to transmit a
signal within the given tolerances.
18. End-to-end quality. Quality related to the performance of a
communication system, including all terminal equipment.
19. End-to-end IP network. The set of exchange link and network
section that provide the transport of IP packets transmitted from
source host to destination host.
20. End-to-end IP network performance. Measurable relative to any
given unidirectional end-to-end IP service.
QoS and NGN (1)
TS
CO1
АSL
ACO
TE1
ATL
ATE
TE2
ATL
ATE
CO21
ATL
ACO
TS
АSL
a) Information transmission for technology “channels switching”
PC
R1
PAN
T1
R2
PCN
T2
R3
PCN
T3
R4
PCN
T4
b) Information transmission for technology “packets switching”
PC
PAN
QoS and NGN (2)
F(t) – distribution function of the IP packets delay
1,0
ΔF(t)=0,001
0
Time
TMIN
TMAX
QoS and NGN (3)
Talker
Listener
G.711 Coder
G.711 Decoder (Packet Loss
Concealment)
Transfer of IP packets
RTP (X mc payload size)
Jitter Buffer (delay Y mc)
UDP
UDP
IP
IP
Lower layers
Lower layers
Lower layers
QoS and NGN (4)
Density of distribution function of the IP packets delay
f1(t)
f2(t)
Time
S1(1)
S2(1)
IPTD
Main directions of analysis
1. Forecasting
2. Network structure
3. Quality of Service (QoS)
4. Traffic engineering
5. Economic analysis
The mean number of phone calls
Calls per minute
100
80
60
40
20
0
4
8
12
16
20
24
Time
of day
The mean number of calls to modem pool
Calls per minute
14000
12000
10000
8000
6000
4000
2000
0
2
4
6
8
10
12
14
16
18
20
22
24
Time
of day
The mean holding time of phone call
Mean holding time (s)
300
240
180
120
60
0
4
8
12
16
20
24
Time
of day
The mean holding time of Internet session
Mean holding time (s)
1200
1000
800
600
400
200
0
0
2
4
6
8
10
12
14
16
18
20
22
24
Time
of day
Busy hour
Traffic
0
6
TBO
TMAX
Time
of day
18
24
ITU-T Recommendation Y.1542 (1)
ITU-T Recommendation Y.1542 (2)
ITU-T Recommendation Y.1542 (3)
Main directions of analysis
1. Forecasting
2. Network structure
3. Quality of Service (QoS)
4. Traffic engineering
5. Economic analysis
Background
Cost-effectiveness of a telecommunications network can be
estimated from two points of view. Firstly, information exchange
is of appreciable benefit when producing any goods or services.
From this point of view, it is very hard to estimate efficiency of
the telecommunications network by units adopted in economics.
It is considered that in countries of EU, one dollar of investments
increases growth of social product by 2.0 – 2.5 dollars. In the
USA this index is even higher: from 4.0 to 8.0 dollars. One of the
possible approaches for obtaining of such estimates is based on
information volume mentioned in the second lecture.
Secondly, the cost-effectiveness of telecommunication network is
estimated from the optimality of its construction, maintenance,
and development points of view. In this lecture exactly that
approach to the analysis of cost-effectiveness related to
telecommunication networks is discussed.
Jipp curve (1)
Jipp curve is a term for a graph plotting the number (density) of
telephones against wealth as measured by the Gross Domestic Product
(GDP) per capita. The Jipp curve shows across countries that teledensity
increases with an increase in wealth or economic development (positive
correlation), especially beyond a certain income. In other words, a
country's telephone penetration is proportional to its population's buying
power. The relationship is sometimes also termed Jipp Law or Jipp's Law.
The Jipp curve has been called "probably the most familiar diagram in the
economics of telecommunications". The curve is named after A. Jipp, who
was one of the first researchers to publish about the relationship in 1963.
The number of telephones was traditionally measured by the number of
landlines, but more recently, mobile phones have been used for the graphs
as well. It has even been argued that the Jipp curve (or rather its
measures) should be adjusted for countries where mobile phones are more
common that landlines, namely for developing countries in Africa.
Jipp curve (2)
Jipp curve (3)
Metcalfe’s Law
Main trends
The following processes play an important role in
the development of modern telecommunications
system:
•Conversion to so-called "customer economics";
•Convergence of telecommunications networks;
•Integration in telecommunications;
•Consolidation in telecommunications;
•Changing of transmission and switching
technologies;
•Market of the new services;
•Increasing role of the content-oriented services.
Classifications of clients (1)
Income share
Portion of clients
Х1%
20%
Portion of clients
100%
Х2%
Х3%
Laggards
Late majority
20%
20%
Х4%
Early majority
20%
Х5%
20%
Early adopters
Innovators
Time
a) Ranking of clients by the level of income
b) Ranking of clients by the time of the service using
NGN as economical solution
Increase of communication Operator’s revenues is possible by
solving of two important problems. Firstly, independently or with
assistance of services Providers, it is expedient to take over another
niche, implicitly related to telecommunications business. The cases
in point are information services which, in the long run will provide
increase of Operators’ revenues. Secondly, revenues increase can be
achieved when minimizing expenses. In this instance the matter
concerns optimal ways of infocommunication system development
and perfecting of maintenance processes. Efficiency of these
processes determines, to a great extent, the level of Operational
expenses on the system management.
NGN concept – from the economic point of view can be considered
as fulfilment of new requirements of potential clients at the expense
of comparatively slight increase of CAPEX with essential decrease
of OPEX.
Main indexes (1)
GNI per capita – Gross national income (GNI) is the sum of value added by all
resident producers plus any product taxes (less subsidies) not included in the valuation
of output plus net receipts of primary income (compensation of employees and
property income) from abroad. GNI per capita is gross national income divided by
mid-year population.
GDP per capita – Gross domestic product (GDP) is the sum of value added by all
resident producers plus any product taxes (less subsidies) not included in the valuation
of output. GDP per capita is gross domestic product divided by mid-year population.
Growth is calculated from constant price GDP data in local currency.
Capital expenditures (CAPEX) are expenditures creating future benefits. A capital
expenditure is incurred when a business spends money either to buy fixed assets or to
add to the value of an existing fixed asset with a useful life that extends beyond the
taxable year. CAPEX are used by a company to acquire or upgrade physical assets
such as equipment, property, or industrial buildings.
Operating expenses (OPEX) are non-capital expenses incurred by a company in
normal operations: salaries and wages, insurance costs, floor space rental, electricity,
computer maintenance contracts, software maintenance contracts, and so on. In brief,
almost all routine expenditures a company makes are operating expenses, except for a
few special non-operating expenses (such as costs of financing a loan, or one-time
costs for closing a plant), and except for capital costs.
Main indexes (2)
Cash flow is the movement of cash into or out of a business, project, or financial product.
It is usually measured during a specified, finite period of time. Measurement of cash flow
can be used
•to determine a project's rate of return or value. The time of cash flows into and out of
projects are used as inputs in financial models such as internal rate of return, and net
present value.
•to determine problems with a business's liquidity. Being profitable does not necessarily
mean being liquid. A company can fail because of a shortage of cash, even while
profitable.
•as an alternate measure of a business's profits when it is believed that accrual accounting
concepts do not represent economic realities. For example, a company may be notionally
profitable but generating little operational cash (as may be the case for a company that
barters its products rather than selling for cash). In such a case, the company may be
deriving additional operating cash by issuing shares, or raising additional debt finance.
•cash flow can be used to evaluate the 'quality' of Income generated by accrual
accounting. When Net Income is composed of large non-cash items it is considered low
quality.
•to evaluate the risks within a financial product. E.g. matching cash requirements,
evaluating default risk, re-investment requirements, etc.
Main indexes (3)
Net present value (NPV) of a time series of cash flows, both incoming and
outgoing, is defined as the sum of the present values (PVs) of the individual cash
flows. In the case when all future cash flows are incoming (such as coupons and
principal of a bond) and the only outflow of cash is the purchase price, the NPV is
simply the PV of future cash flows minus the purchase price (which is its own PV).
NPV is a central tool in discounted cash flow (DCF) analysis, and is a standard
method for using the time value of money to appraise long-term projects. Used for
capital budgeting, and widely throughout economics, finance, and accounting, it
measures the excess or shortfall of cash flows, in present value terms, once
financing charges are met.
The NPV of a sequence of cash flows takes as input the cash flows and a discount
rate or discount curve and outputting a price; the converse process in DCF analysis,
taking as input a sequence of cash flows and a price and inferring as output a
discount rate (the discount rate which would yield the given price as NPV) is called
the yield, and is more widely used in bond trading.
Each cash inflow/outflow is discounted back to its present value (PV). Then they are
summed. Therefore NPV is the sum of all terms,
Main indexes (4)
Rt
1  i 
t
,
where
•t – the time of the cash flow
•i – the discount rate (the rate of return that could be earned on an investment
in the financial markets with similar risk.)
•Rt – the net cash flow (the amount of cash, inflow minus outflow) at time t.
For educational purposes, R0 is commonly placed to the left of the sum to
emphasize its role as (minus) the investment.
The result of this formula if multiplied with the Annual Net cash in-flows and
reduced by Initial Cash outlay will be the present value but in case where the
cash flows are not equal in amount then the previous formula will be used to
determine the present value of each cash flow separately. Any cash flow within
12 months will not be discounted for NPV purpose.
Net present value (NPV)
This index allows finding the correlation between
investments and future income.
Cash Flow on the input CFin (t ) is directed towards
network modernization, which can be considered an
investment project. As a result, output flow CFout (t ) is
generated.
CFin(t)
Network modernization
(Investment process)
CFout(t)
Example of NPV (1)
NPV(t)
Payback
period
Network implementation
Network
creation
modernization
t
Example of NPV (2)
Source: ITU
Average revenue per user
Average revenue per user (sometimes average revenue per unit)
usually abbreviated to ARPU is a measure used primarily by
consumer communications and networking companies, defined as
the total revenue divided by the number of subscribers.
This term is used by companies that offer subscription services to
clients for example, telephone carriers, Internet service providers,
and hosts. It is a measure of the revenue generated by one customer
phone, PC, etc., per unit time, typically per year or month. In
mobile telephony, ARPU includes not only the revenues billed to
the customer each month for usage, but also the revenue generated
from incoming calls, payable within the regulatory interconnection
regime.
This provides the company a granular view at a per user or unit
basis and allows it to track revenue sources and growth.
Analysis in the field of
telecommunications
Questions?
Instructor: Prof. Nikolay Sokolov, e-mail: [email protected]