lecture#08 analysis in the field of telecommunications the bonch-bruevich saint-petersburg state...

Lecture#08

Analysis in the field of telecommunications

The Bonch-Bruevich Saint-Petersburg State University of Telecommunications

Series of lectures “Telecommunication networks”

Instructor: Prof. Nikolay Sokolov, e-mail: [email protected]

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/

http://en.wikipedia.org/

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

Time

Number of PSTN subscribers

T1 T2T0

F(t)

F3(t)

F2(t)

F1(t)

100%

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 1( )F t and 2 ( )F t is shown on the figure. It is assumed that statistical data cumulated during period of time 0[ , ]rt t allow determining of analytic expressions for the functions 1( )F t and 2 ( )F t . Statistical data are

depicted by squares on the segment 0[ , ]rt t .

Problem put by comes to the calculation of values of these functions for the forecasting period – 0[ , ]ft t . Corresponding trends are depicted by dotted lines. Besides, it is expedient to

estimate confidence intervals. On the figure they are shown for the function 2 ( )F t by dash-dot 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

Time

Extrapolation of trends

tr t0 tf

F2(t)

F1(t)

Trends for functions F1(t), F2(t)

Forecasting of the future and the past

Year

Behavior of the investigated process for three ensembles

0 1 2 3 4 5 6 7 8 9 10 11 12 13

{X1} {X2} {X3}

F(t)

Forecasting related to access networks

Narrow band lines

Only mobile

Only broadband

Number of households, millions

40,0

30,0

20,0

10,0

0,0

2002 2007 2012

60%

20%

Year

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)

Source: Reference for Business. Encyclopedia of Small Business, 2nd edition.

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.


1. Forecasting





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

a) Star b) Tree

a1

a2a3

a4

a5

a6

a1

a2a3

a4

a5

a6

c) Ring d) Full mesh

a1

a2a3

a4

a5

a6

a1

a2a3

a4

a5

a6

Oriented, unoriented and mixed graphs

a1

a3

a) Oriented graph

a2

a4

a5

a6

b) Unoriented graph

a2

a4

a5

a6

c) Mixed graph

a2

a4

a5

a6

a3 a3c23 l23 r23

Example of finding the Steiner point

a1

a3 a2

l l

l

3

l

Change of the access network structure

CO CO

TS1 TS2

TS3

TS4

TS1TS2

TS3

TS4

1l

2l

3l

4l 1

L2

L

3L

3x

2x1

x

a) Access network without remote modules b) Access network with remote modules

R1

R2

R3

Two variants of the ring network construction

a) First structure of transport network b) Second structure of transport network

a1

a2a3

a4

a5

a6

a1

a2a3

a4

a5

a6

Access network modernization

Main distribution frame

Distribution cabinets

Line between cabinets

Mai

n ca

bles

Distribution cables

Distribution cables

X1

X2

Example of the several rings creation

30

810

126

9

4

1

2

∞∞

57

11

Transformation of the optimization problem (1)

Ring I

Ring II

Ring III

Ring I

Ring II

TS TF

Subscript “s” – start, subscript “f” – future


min

max

z1 z2 z3 z4 z5 z6 z7

z

A1

F(z)

A3

A6

A5

A4

A2

– P12

+P01

+P23

– P34

+P45

– P56

Example of the “stable solution”


a2

a1 a1

a2

a3 a3

a4 a4

a5

a6

a7

Deleted edge

TX

p7 << p5

p6 → 1

P7 → 0

Average length of line

0,383l S 0,379l S0,376l S

0,41l S 0,43l S 0,488l S

d) Ellipse with ratio between axes 2:1

e) Rectangle with ratio between sides 2:1

f) Equilateral triangle

a) Circle b) Square c) Regular hexagon


1. Forecasting





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.

Equivalent distance during normal talk, m Type of connection in PSTN 1923 1933 1950 1985 Optimal

Local 14 8.3 3.5 2.0 Long-distance 25 11.7 5.0 2.0

Comfort distance

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)

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)

CO1 TE1 TE2 CO21TS TS

ACO ATLАSL АSLATE ATE ACOATL ATL

R1PC PC

T1 PCNPAN PANT2 T3 T4PCN PCN

R2 R3 R4

a) Information transmission for technology “channels switching”

b) Information transmission for technology “packets switching”

QoS and NGN (2)

1,0

0

F(t) – distribution function of the IP packets delay

Time

ΔF(t)=0,001

TMIN TMAX

QoS and NGN (3)

Talker

G.711 Coder

RTP (X mc payload size)

UDP

IP

Lower layers Lower layers

Listener

G.711 Decoder (Packet Loss Concealment)

Jitter Buffer (delay Y mc)

UDP

IP

Lower layers

Transfer of IP packets

QoS and NGN (4)

Density of distribution function of the IP packets delay

Time

S1(1) S2

(1)

f1(t) f2(t)

IPTD


1. Forecasting





The mean number of phone calls

Calls per minute100

80

60

40

20

0 4 8 12 16 20 24

Time of day

The mean number of calls to modem poolCalls per minute

Time of day

2000

4000

6000

8000

10000

12000

14000

0 2 4 6 8 10 12 14 16 18 20 22 24

The mean holding time of phone call

300

240

180

120

60

04 8 12 16 20 24

Time of day

Mean holding time (s)

The mean holding time of Internet session Mean holding time (s)

200

400

600

800

1000

1200

0 2 4 6 8 10 12 14 16 18 20 22

0

24

Time of day

Busy hour Traffic

Time of day

241860TBO

TMAX

ITU-T Recommendation Y.1542 (1)


1. Forecasting





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)

20%

20%

20%

20%

20%

Income share Portion of clients

Х1%

Х2%

Х3%

Х4%

Х5%

a) Ranking of clients by the level of income b) Ranking of clients by the time of the service using

Portion of clients

Time

100%

Innovators

Early adopters

Early majority

Late majority

Laggards

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)

,

1t

t

R

i

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)

Network modernization(Investment process)

CFin(t) CFout(t)

This index allows finding the correlation between investments and future income. Cash Flow on the input ( )inCF t is directed towards network modernization, which can be considered an investment project. As a result, output flow ( )outCF t is generated.

Example of NPV (1) NPV(t)

t

Network creation

Network implementation

mod

erni

zati

on

Payback period

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.

Instructor: Prof. Nikolay Sokolov, e-mail: [email protected]

Questions?

Analysis in the field of telecommunications

lecture#08 analysis in the field of telecommunications the bonch-bruevich saint-petersburg state...

Documents