Using data analytics we developed a value-based capex optimisation plan with site-by-site upgrade recommendations for an MNO

The problem

• Our client, a leading mobile operator in South-East Asia, traditionally performed capex investments purely based on network requirements (e.g. when there was significant congestion at a site) and was looking to supplement this with business/financial metrics to aid decision-making
• Analysys Mason was engaged, together with DataSpark, to jointly develop a value-based capex optimisation tool which would enable the client to obtain site-by-site upgrade recommendations based on a combination of network, business and financial considerations

The solution

• We gathered transaction data detailing the volume of voice/SMS/data traffic by site, split by segments and derived the yield by service for each segment based on a deep-dive analysis of customers within each segment
• This allowed us to then calculate site-level revenue based on the unique profile of traffic at each site and the yield by service and segment
• We projected the expected traffic for each site to determine the capacity requirements per site in the coming year – this was compared to the current site capacity to identify the incremental capacity required
• We evaluated all upgrade combinations for each site based on the capacity requirements and identified the best-fit upgrade that offered the highest RoI¹ based on the capex involved and addressable incremental revenue 
• We assessed the sites to be upgraded and level of priority, given a limited budget based on these metrics: network (congestion, average throughput), financial (RoI, site revenue) and business (share of high-value customers)

Figure: Ranking of sites by revenue and customer experience

The result

• We successfully delivered a value-based capex optimisation plan which provided site-by-site upgrade recommendations – moreover, we demonstrated that our approach addressed 16% more revenue and achieved an 11% improvement in RoI compared with the traditional approach
• We demonstrated the flexibility of our tool, which used a combination of network, business and financial objectives to arrive at a capex plan

¹ Return on investment