March 16, 2011
Microwave Total Cost of Ownership (TCO) Pt. 1
When choosing the right backhaul technology, total cost of a microwave system is a critical, often overlooked, consideration. TCO is not widely understood today. Lack of understanding of microwave TCO can lead to poor decisions about choice in backhaul technology and obscure the relative importance of features. Features that lower critical components of TCO are often not given enough attention.
A summary of a TCO model for a mobile operator in North America is shown below. Clearly, ongoing OPEX resulting from tower leases represent largest contributor to total cost. These lease costs include tower space for antennas and cable runs, shelter/cabinet space and power, and ongoing move/add/change fees regularly paid to tower companies. The largest portion of this tower lease is related to the antenna size. Microwave products and features that enable smaller antennas sizes, less indoor space, and fewer cables are most important for operators.
10 Year Microwave Total Cost of Ownership
*Note: for private network applications (like state/local governments, public safety organizations, and utilities) who generally own towers, initial CAPEX is often higher, leading to an overall reduction in ongoing OPEX and TCO.
Make sure to check back next week for post #2 ” How Important is Initial CAPEX?” where I breakdown the true costs of initial and ongoing CAPEX.
Product Marketing, Aviat Networks