LTE Backhaul

3 Economic Modeling and Strategic Input for LTE Backhaul

Gabriel Waller and Esa Markus Metsälä

Nokia Networks, Espoo, Finland

3.1 Introduction

The planning and optimization of LTE backhaul has to be based on a company’s overall strategy. This sets the scene for high-level and detailed designs. The strategy for LTE backhaul is naturally linked to a LTE radio network strategy since both backhaul and radio network are part of the very same LTE service delivery vehicle. Addressing backhaul and radio network together keeps costs down while maintaining service offering and network performance at their target level.

A long-term intention often includes investments and planning of the usage of capital. Economic analysis is needed for decision making, in order to estimate the value of the project to the company. Financial metrics are calculated to compare two or more technical alternatives from an economic viewpoint. Business case development requires a command of business case modeling as well as an understanding of the subject, such that the model can essentially capture all relevant aspects and present them in monetary terms.

Economic modeling is very useful for all levels of planning, not only for the long-term investment preparation, since now also smaller optimization cycles can be motivated by business benefits and different ideas compared. A model may be prepared by finance professionals with the help of backhaul experts, or as well by backhaul experts with contribution ...