Towards Affordable Provisioning Strategies for Local Mobile Services in Dense Urban Areas A techno-economic Study

Abstract: The future mobile communication networks are expected to cope with growing local usage patterns especially in dense urban areas at more affordable deployment and operation expenses. Beyond leveraging small cell architectures and advanced radio access technologies; more radio spectrum are expected to be required to achieve the desired techno-economic targets. However, securing efficient radio spectrum resources remain a challenging task especially in the bands with favored propagation characteristics. Therefore, the research activity has been directed towards discussing the benefits and needs for more flexible and local spectrum authorization schemes. This thesis work is meant to be a contribution to this ongoing discussion from a techno-economic perspective  that aim to investigate three main questions: (i) how can the need for and benefit of local spectrum authorization schemes be valued from the perspective of established mobile network operators, and (ii) Will the shift towards more flexible and local spectrum authorization schemes impact the existing mobile service ecosystem and in what manner.In chapter three, the role and value of the different local spectrum authorization schemes in shaping an economic viable provision strategy for the targeted local mobile services in future dense urban areas are investigated. For this purpose, the opportunity cost approach is used to evaluate the elasticity of substitution between the spectrum resources and network infrastructure. The main results in chapter three indicate the economic incentives to deploy more small cells based on local spectrum authorization schemes are subject to the additional deployment and operation costs that can be avoided if a macro-cell layer is deployed instead. However, the backhaul links costs and additional radio equipment cost for aggregating spectrum resources in different bands at the small cell level will have high impact on the anticipated  engineering value. Nonetheless; in dense and very dense deployment scenarios of small cells, where the density of radio sites is equal or larger than the active mobile subscribers' density, access more spectrum resources based on local authorization schemes will have a key role in providing the targeted high mean instantaneous data rate per active end-subscriber. Moreover, established actors (e.g. incumbent MNOs) experiencing shortage in their licensed spectrum resources can evaluate the spectrum value base on their ability to offer the targeted mobile services in strategic spotty local areas.While in chapter four, the possible business and cooperation models around local shared spectrum authorization from the perspectives of established mobile network operators (MNOs) and emerging local network operators (LNOs) are identified. From the perspective of an established MNO, the strategic value of the flexible spectrum authorization option could be very high in certain local environments with potential high return on investment (ROI). On the other hand, emerging actors can benefit from the flexible spectrum authorization options to focus on the niche market in certain local areas. Other viable business models for an emerging actor rest with the possibility to enter into different cooperation agreements to deploy and operate dedicated local mobile infrastructure on behalf established mobile network operators; especially in situations where the deployment of mobile networks brings extra activities and overheads to the MNOs.  Moreover, by allowing other actors, rather than the traditional mobile network operators, to access spectrum resource at a reasonable or no cost, one of the major traditional investment barriers in mobile market will be relaxed and consequently more independent business models may emerge. As an example, actors with sufficient technical expertise such as network equipment vendors may exploit local shared spectrum resources to provide tailored local mobile services and enter into different roaming agreements with established mobile network operators.