RESEARCH REPORT

In brief

In brief

  • With the widespread acceleration of fiber rollout, CSPs are setting up to eliminate legacy copper and HFC networks.
  • This allows to free up Central Office (CO) space – while increasing service quality and reducing cost.
  • This POV highlights specific aspects of the CO as key elements of the overall fiber strategy, providing an opportunity to save millions of dollars.
  • By following four phases and avoiding the pitfalls CSPs can potentially save over 30% compared to current total infrastructure costs.


Why you should consider a Location Strategy

Many CSPs are currently accelerating their fiber rollout, setting the foundation for their long-term competitiveness. While in the early days, fiber was an added technology, it is now becoming the default access technology. This leaves existing copper and HFC networks as legacy which will eventually be decommissioned. This will lead to a significant shrinkage in space requirements for many Central Offices - a good percentage can even be completely dismantled.

Accenture experience reveals a long-term CO savings potential of more than 30% (resulting mainly from location optimization) compared to current total infrastructure cost, allowing Central Offices to become a source of significant cost reduction.

However, we observe that the lack of a location strategy paradoxically leads to a continuous increase in location space as CSPs fail to decommission legacy infrastructure. This missed opportunity of an integrated approach leads to fragmented network infrastructure, overbuilds, high operational cost and sub-optimal capital allocation.

Thus, we recommend including a location strategy as part of an overall fiber rollout strategy to optimize investments holistically.

Our solution in four phases

Accenture identified four distinct steps to unlock this trapped location optimization potential. They need to be addressed now to set the course for long-term optimization.

Iterative Cycle – manage and monitor the migration

As you asses the current situation, you need to be able to create a 360-degree view for a given location as a key base for any further activity. We can distinguish between factors that are directly linked to a CO, like lease terms, maintenance, and power consumption, as well as failure rates, and factors that influence the number and size of COs needed. Transparency on the planned rollout is key to derive a phase-out roadmap of the legacy equipment, unlocking the saving potential.

An organization needs to have clarity among three factors, each of which has the potential to accelerate or block the entire value-based fiber rollout approach. It is crucial to have a forward-looking strategy for all elements that affect the Central Office. If only 90% of a legacy network is replaced by fiber, the legacy platform cannot be decommissioned and thus the savings cannot be realized. Such potential can only be calculated and properly integrated in a build model if the organization has clarity on:

  • Architectural Guidelines: Clarifying maximal distances, location requirements in terms of routing, backup and hardening.
  • Financial structure: Clarifying tradeoffs between leasing and owning the COs, as well as clear requirements towards ROI and IRR.
  • Customer impacts: Setting standards for product lifecycle, acceptable churn and transition timelines.

The next step is to identify the most lucrative business cases. Site location is only one of the many factors that drives a value-based rollout strategy. It has, however, a significant impact on the prioritization of certain high-cost COs.

There are several central questions that determine the prioritization of some COs over others. To factor these into the strategy, we found the pain points that might limit the speed of the rollout to be the organization’s tolerance level for changes, migration and customer management as well as regulatory impacts such as policies and subsidies.

To work around the unpredictability, we build a simulation model that combines the inputs and allows CSPs to identify the impact of the anticipated and potential adaptions.

This model helps to identify three to five distinct scenarios (e.g. conservative or accelerated), allowing CSP to foresee the impact of the anticipated changes, and providing a tested foundation to define a strategy.

Equipped with our strategy and agreed goals, we are now entering an iterative cycle. In this last phase execution and migration progress can be tracked and those new insights can be fed back into the planning models.

While the initial planning can follow standard best practices within a CSP’s Project Management Office (PMO), the execution and monitoring of rollout status typically requires real-time responsiveness. This includes, firstly, the management of all ongoing fiber rollout-related initiatives, including all network design, permitting and crew capacity management.

Secondly, the company needs to adapt the product portfolio configuration and last mile installations. Finally, they need to plan and execute the Central Office infrastructure decommissioning. End-to-end process management must be in place to detect and resolve delays early on, as well as to help PMOs factor in pilot insights and completed migrations each step of the way.


How Accenture can be your guiding partner

Holistic view on business and technology goals

  • Accenture has vast experience in inventory systems, business process analysis and design, and building management systems.
  • Our network engineers understand future trends and needs.
  • Through our value-based rollout capabilities, we can simulate the impact of a location strategy on future network rollouts.

Extensive project management experience

  • With our extensive experiences we can guide CSPs in defining, controlling, and enforcing architectural guidelines.
  • With collaborative methodologies, we enable organizations to reach aligned goals, define the assigned value, and provide advice on how to handle trade-offs so that complex conflicts can be resolved.

Global network

  • Accenture’s global network of business analysts use a wide range of tools designed to calculate business cases and build simulations. This enables to start with simple tools, and then enhance them with more complex scenarios and User Interfaces to increase fidelity and usability.

Migration

  • We help CSPs around the globe to streamline their fiber rollout management, build forecasts and tracking based on KPI which allow senior management to identify potential issues early on and enable corrective actions.
  • Daily updates, a consistent data model and AI-driven forecasts are also key components in remaining on track.

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Challenges

There are several pitfalls one must avoid on this journey. We have found four typical ones which can be side-stepped by asking yourself the right question:

Data foundation and consistency

Can you calculate the infrastructure contribution margin on Central Offices for each active subscriber?

Decommissioning cost

Are you able to list the cost drivers for re-sizing a Central Office?

Keeping migration timelines

Do you know your current migration potential by subscriber, specifically those on a legacy technology with fiber availability?

Absent internal alignment and priorities

What is your acceptable level of added product activation time for an additional fiber drop vs provisioning it directly on legacy infrastructure?

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How to get a CO savings potential of about 30%?

2-5%

Of approximate savings potential by moving active equipment to basements due to cheaper rent.

15-20%

Of approximate savings potential by freeing up unused space of legacy equipment.

5-8%

Of approximate savings potential can be gained by completely dismantling obsolete Central Offices.

Conclusion

With a stable or even shrinking top line, CSPs are now focused on looking at their expenditures to free up cash for needed investments into 5G and fiber deployments. Both areas have a very long ROI horizon. Finding savings potential to improve these cases will help CSPs to accelerate their deployment roadmap.

Site location strategy is often overlooked, with clear repercussions. With the broad advent of fiber, there is an opportunity to revisit the strategy, with the potential for multi-million savings. Integrating locations as part of a value-based rollout strategy will shift the dynamics and prioritization - and enable a more holistic optimization.

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