Building a Business Case for Wireless Broadband in Public Transportation
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1 WCAI Global Development Committee webinar on public transportation Building a Business Case for Wireless Broadband in Public Transportation Monica Paolini Senza Fili Consulting August 18, 2009
2 2 Senza Fili Consulting LLC Today s webinar Monica Paolini President Senza Fili Consulting Michael Bare Stock Maintenance Officer MBTA
3 April 6, Senza Fili Consulting LLC About Senza Fili Consulting Technology focus Mobile and fixed wireless broadband technologies VoIP, convergence, and mobile broadband applications Network infrastructure and devices Leveraging emerging technologies to support new services Approach Quantitative analysis International perspective Expertise in consumer, enterprise, and vertical markets Flexible approach to meet client needs Services Financial modeling Business development and strategy Market research and forecasts RFP and other procurement management Publications and presentations
4 Multiple technologies and spectrum bands meet requirements in different ways Different technologies Satellite Cellular WiMAX or proprietary Wireless Broadband Access (BWA) Wi Fi Mesh Any combination of the above Multiple spectrum options August 16, 2009 Licensed License exempt Lightly licensed (e.g., 3.65 GHz) Special bands (e.g., 4.9 GHz) Any combination of the above Different business models Opex/Capex tradeoffs Control over infrastructure and performance Installation pervasiveness (trains only, trackside, stations) Bandwidth requirements Hosted applications Choice of solution depends on requirements and constraints of transit agency (No one size fits all solution) 4 Senza Fili Consulting LLC
5 Why wireless broadband networks for public transportation? 5 Senza Fili Consulting LLC Isn t there cellular coverage already? Yes, but there are coverage holes, especially in rural areas Yes, but increasingly networks are congested Yes, but bandwidth is often limited Yes, but it is expensive for operators to support high traffic users Yes, but multiple handoffs at the same time may disrupt connectivity Why is a separate network needed? Better bandwidth for passengers More passengers, fewer drivers on the road Support for operational, safety, passenger applications Improved travel experience
6 6 Senza Fili Consulting LLC Satellite: easy installation, high opex No trackside installation Good coverage, especially in rural areas High operating costs Limited bandwidth (especially in the uplink) Best when combined with other low cost technologies Well suited to large networks crossing extended highly rural areas
7 7 Senza Fili Consulting LLC Cellular: easy installation, but capacity limitations No trackside installation Good coverage, especially in urban and suburban areas Low installation costs, operating costs may be high Limited bandwidth (especially in the uplink) No QoS Best when multiple cellular networks are jointly connected to the train Fast to deploy, but transit operator depends on cellular carriers
8 Cellular operators: friends or foes for transit agencies? 8 Senza Fili Consulting LLC Cellular performance keeps improving True broadband connectivity available Lower costs Better coverage Train operators can use multiple cards concurrently Congestion in cellular networks is rising Operators keen to reduce traffic and enforce traffic caps Subscriber traffic grows faster than network capacity Rail operators generate large amount of traffic, limited revenues What s the business case for mobile operators? Do they risk cannibalization? Solid, long term agreements with mobile operators are essential
9 WiMAX or proprietary wireless technology offer best performance, but installation costs are high August 16, Senza Fili Consulting LLC Trackside base stations required Good throughput and coverage Low operating costs, but high installation costs Coordination with trackside owner required Best when requirement performance are high and QoS is needed Full control over network comes at a price
10 Increasingly multiple technologies are jointly used within the same network August 16, Senza Fili Consulting LLC More flexibility and better performance Higher complexity, higher opex and capex Lower hardware costs make this solution more attractive Often this approach is needed where both public access and safety/operational applications are hosted High performance is needed to support a wide range of applications
11 Many transit broadband networks are now commercial 11 Senza Fili Consulting LLC France: Thalys uses a satellite link UK: Virgin, National Express, Heathrow Exprees, multiple bus companies use cellular and/or trackside solutions USA: UTA Frontrunner deployed a 5.8 GHz WiMAX based network in Salt Lake City in the US Cellular complement with 5.8 GHz to cellular handoffs Free access, 1,000 connected passengers out of 8,000 USA: MBTA in Boston deployed a cellularbased solution More on this later in the webinar USA prospects: 3.65 GHz band where available 4.9 GHz for safety applications Source: AzulStar
12 For transit operators wireless broadband is becoming a priority 12 Senza Fili Consulting LLC Wi Fi is an expected amenity from passengers Willingness to pay is low Bandwidth usage and passenger expectations high Safety and security requirements are on the rise Government and state requirements Matching funds available to roll out the network (but often not for opex) New technologies, improved performance make wireless broadband affordable Wireless broadband in the transportation sector is becoming hot But in the US transit wireless broadband networks are still in their early stage Still few commercial networks Focus is still on (free) Wi Fi access for passengers Room for growth, after learning lessons from other countries
13 There is a strong value proposition beyond passenger Internet access 13 Senza Fili Consulting LLC Improve safety and security Surveillance, sensors Increase operational efficiency Reduce operating costs Provide a better service to passengers Internet access, preferably free Transit information in real time News, entertainment Reduce traffic congestion by increasing public transit ridership Many operators are publicly owned Increase ridership revenues Wireless broadband brings in synergies across applications
14 14 Senza Fili Consulting LLC Most frequent questions from transit operators What is the business model? Public access is not sufficient to justify costs Safety and operational applications are crucial to the business case Multiple ownership models can be successful What is the best technology? No single technology can meet all requirements Cellular is often a complementary technology Cellular backhaul lacks sufficient capacity and can be expensive (and maybe not available for long) Can we make money from passenger access? Few passengers are willing to pay for access and resent paying More revenues can be made by offering free access and selling more tickets Do we really need to install trackside base stations? Capexis higher than cellular or satellite Operating costs are lower for trackside solutions Trackside deployment give transit operators control over infrastructure
15 With multiple technologies, devices and applications, the challenge is to integrate the network August 16, Senza Fili Consulting LLC The choice for transit operators is becoming complex Multiple cost effective solutions and vendors Constantly improving performance: wait for next generation? Train operators need to develop a business plan that makes sense for them likely to be different in each case Requirements, functionality, and costs of applications have to be carefully assessed: Which applications can reduce costs or increase revenues? Developing a wireless broadband project internally can become challenging: How to work across divisions? How to work with rail partners? How to collaborate with transit agencies operating in the same area?
16 But the major challenges are not due to the technology 16 Senza Fili Consulting LLC The key question is how to roll out wireless broadband on trains and other transit networks Train operators need to develop a business plan that makes sense for them likely to be different in each case Requirements, functionality, and costs of applications has to be carefully assessed: Are they worth it? What application is more important? How to develop a wireless broadband project internally? How to work across divisions? How to work with rail partners? Or collaborate with fellow operators?
17 17 Senza Fili Consulting LLC Further resources Wireless broadband on public transportation. Webinar presentation. July Tracking the WiMAX business case. Using WiMAX as part of a multi technology solution, train operators can build a sustainable business model for wireless broadband. June WiMAX Vision. WiMAX for Public Transportation. Presentation at the WiMAX Forum World Congress 09. June Taking wireless broadband to the public transportation and beyond. In the WCAI Broadband Stimulus report (free download at Articles and presentations available at 4G World in Chicago, September 17 th, 2009, 4:00pm Panel on Mobile Internet Applications in the Transportation Sector Moderator: Monica Paolini, Senza Fili Consulting Panelists: Jim Allison, Capitol Corridor; Jim Baker, Icomera; Nick Edouard, Nomad Digital; Matt Hardison, Amtrak
18 Senza Fili Consulting +1 (425) Senza Fili Consulting LLC
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