Laitsou, Eleni; Ioannou, Nikos; Katsianis, Dimitris

Conference Paper
5G Fixed Wireless Access for rural broadband

31st European Conference of the International Telecommunications Society (ITS): "Reining

in Digital Platforms? Challenging monopolies, promoting competition and developing
regulatory regimes", Gothenburg, Sweden, 20th - 21st June 2022
Provided in Cooperation with:
International Telecommunications Society (ITS)

Suggested Citation: Laitsou, Eleni; Ioannou, Nikos; Katsianis, Dimitris (2022) : 5G Fixed
Wireless Access for rural broadband, 31st European Conference of the International
Telecommunications Society (ITS): "Reining in Digital Platforms? Challenging monopolies,
promoting competition and developing regulatory regimes", Gothenburg, Sweden, 20th - 21st
June 2022, International Telecommunications Society (ITS), Calgary

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Title: “5G Fixed Wireless Access for rural broadband”

Authors and Affiliations:

Dr. Eleni Laitsou
Dept of Informatics and Telecommunications, Digital Systems Dept
Schools of Science
National and Kapodistrian University of Athens University of Thessaly
Athens, Greece Larissa, Greece
Email: [email protected] Email: [email protected]

Nikos Ioannou
Dept of Informatics and Telecommunications, Schools of Science
National and Kapodistrian University of Athens
Athens, Greece
Email: [email protected]

Dr. Dimitris Katsianis

Dept of Informatics and Telecommunications, Schools of Science
National and Kapodistrian University of Athens
Athens, Greece
Email: [email protected]

Abstract
Mobile communication technology is moving into the fifth generation (5G) which is
expected to overcome the new challenges that have emerged with the Internet of Things
(IoT) and the exponential growth in demand for traffic [1], [2], [3]. The advent of 5G
is allowing mobile technology to intersect with the demands of fixed line services. With
fixed wireless access (FWA), network operators can provide ultra-fast broadband to
suburbs and rural areas to support home and business applications where fiber
installation and maintenance is very expensive.
In this paper a techno-economic study is performed to assess the feasibility of the
deployment of a 5G Standalone fixed wireless access network in a rural area. 24
European countries are taken as case studies. In each of these cases, the conditions are
studied under which such an investment can be economically viable through increased
revenues and reduced costs.
The findings of this study can be an important tool for decision/policy makers in
investment strategies for rural broadband networks and for the European Commission
that has launched a targeted public consultation on a proposed revision of the
Guidelines on State aid rules for broadband networks, 5g fixed wireless access networks
included1.

Keywords
5G fixed wireless access network, techno-economic evaluation, TONIC model, rural
area, Net Present Value, Internal Rate of Return, Payback year, CAPEX

1. Introduction
Rural Internet users continue to suffer from poor broadband due to the high costs to
build wired network infrastructure because of the low density of users, resulting in a
digital divide between rural and urban communities. Usually, mobile and fixed access
have been provided through different technologies, with mobile services coming from
cellular technologies and fixed broadband coming from fixed access technologies.
However, a convergence between mobile and home access has started to emerge
through cellular fixed wireless access (FWA) technology, making a cost-effective
alternative for fixed broadband. The development of 5G networks is the next step in the
telecommunications market which is expected to overcome the technological
challenges.
However, only a few studies have been carried out concerning the techno-economic
evaluation of 5G [4]. This paper presents a techno-economic analysis to assess the
feasibility of the development of a 5G Standalone fixed wireless access network in
different types of rural areas based on household density. The European countries have
been taken as case studies, twenty-four (24) in total, i.e., all the European countries
except the UK, Luxembourg, Malta and Cyprus because for these countries there is no
accurate data.
In each of these countries, the following financial indicators for the assessment of the
investment are evaluated and compared: Net Present Value (NPV), Internal Rate of
Return (IRR), Payback year. Furthermore, the costs of the network components are
used to calculate investments for each year and Capital Expenditure (CAPEX).
The remainder of this paper is organized as follows. Section 2 presents a literature
review of the existing bibliography, while Section 3 describes the methodology. Section
4 presents the results and the related discussion. Finally, Section 5 summarizes the
analysis of the findings.

1
https://ec.europa.eu/commission/presscorner/detail/en/ip_21_6049
2. Literature Review
There have been many studies in recent years in the area of the fifth-generation
communication technology including the main features, the performance, the
deployment and the applications of this technology standard. The discussion below
follows a chronological order of the relevant studies and focuses on their outcomes.
Salah et al. [5] examine the evolution of mobile communication networks starting from
the first generation through to the fifth-generation with comparative studies.
Subsequently, the main requirements of 5G networks and emerging technologies are
highlighted. Furthermore, an overview of several technologies that might be used to
achieve the 5G requirements including Massive-MIMO, Millimetre-waves,
beamforming, full-duplex, and Small-Cells are explained.
Lappalainen et al. [6] study the planning of a rural 5G multi-user massive MIMO fixed
wireless access system to offer fixed broadband service to homes. Specifically, they
aim to determine the user limit, i.e., the maximum number of homes that can
simultaneously receive target minimum bit rates (MBRs) on the downlink (DL) and on
the uplink (UL) given a set of network resources and a cell radius. They study the
impact of group size and show that smaller groups yield larger user limits in a 3.5 GHz
band.
Alimi et al. [7] discuss different network requirements of the 5G FWA system. Also, a
comprehensive overview of the broadband schemes’ technical challenges is presented
and they proffer viable solutions for achieving cost-effective and scalable 5G FWA
solutions. Moreover, they exploit diversity scheme and present a closed- form
expression for the multiple-input, multiple-output scheme in which the path-loss (PL)
and beam-forming schemes are considered. Simulation results show significant
performance improvement compared with a single-input single-output configuration.
In Neokosmidis et al. [8] a road mapping activity identifying the key technological and
socio-economic issues is performed, so as to help ensure a smooth transition from the
legacy to future 5G networks. Based on the fuzzy Analytical Hierarchy Process (AHP)
method, a survey of pairwise comparisons has been conducted within the CHARISMA
project by 5G technology and deployment experts, with several critical aspects
identified and prioritized.
The above-mentioned research reveals important aspects of the 5G technology. This
study’s contribution focuses on the techno-economic analysis defining the conditions
under which the deployment of a 5G Fixed Wireless Access network in different types
of rural areas that correspond to the rural areas of the 24 European countries could be
economically viable.

3. Methodology
In this study, an economic and financial analysis for the deployment of 5G fixed
wireless access network in a rural area is performed to describe the revenue and predict
costs. The techno-economic methodology is based on a bottom-up analysis of
discounted cash flows for network deployment, operation and maintenance.
An eight-year study period is assumed, from 2023 to 2030, a reasonable period for
broadband network deployments, considering the time it usually takes to reach market
maturity. The market penetration of broadband services and the tariffs for these services
as well as their market share have to be defined. For the analysis, demand and price
forecasts have been incorporated in order to calculate network components needed as
well as revenues generated by network services. Two service bundles are offered, the
Gold one which supports a download speed of 300 Mbps and the Bronze one which
supports 100 Mbps.
Regarding the forecasting model, the TONIC model is chosen, a model that well fits
the services having diffusion-type characteristics of broadband telecom.

Table 1 European Countries Household Density

Rural HHs Rural

HH
EU Country Code & Area Size
density
enterprises (km2)
Austria AT 1,639,784 4,841 339
Belgium BE 724,035 2,159 335
Bulgaria BG 889,331 962 924
Croatia CR 593,033 1,847 321
Czechia CZ 1,797,534 2,413 745
Denmark DK 1,243,045 3,065 406
Estonia EE 288,006 1,546 186
Finland FI 919,306 10,015 92
France FR 11,753,633 33,762 348
Germany DE 8,249,638 18,522 445
Greece EL 1,157,366 4,715 245
Hungary HU 1,267,434 2,137 593
Ireland IE 891,523 4,089 218
Italy IT 4,648,436 7,376 630
Latvia LV 294,719 980 301
Lithuania LT 555,168 406 1,367
Netherlands NL 812,250 156 5,219
Poland PL 4,663,458 12,724 367
Portugal PT 1,247,962 5,730 218
Romania RO 3,193,054 6,870 465
Slovakia SK 873,732 1,576 555
Slovenia SI 391,459 934 419
Spain ES 2,654,672 4,601 577
Sweden SE 1,530,182 5,012 305

As case studies, 24 countries are used, all the European countries except the UK,
Luxembourg, Malta and Cyprus because for these countries there is no accurate data.
For each country, total rural area size and the number of rural Households and active
enterprises were used for the corresponding dimensioning/coverage and demand
parameters.

The Rural Area Size is estimated with the use of the following equations:
𝑅𝑢𝑟𝑎𝑙_𝐴𝑟𝑒𝑎_𝑆𝑖𝑧𝑒
= 𝑇𝑜𝑡𝑎𝑙_𝐴𝑟𝑒𝑎_𝑜𝑓_𝑃𝑟𝑒𝑑𝑜𝑚𝑖𝑛𝑎𝑛𝑡𝑙𝑦_𝑅𝑢𝑟𝑎𝑙_𝑅𝑒𝑔𝑖𝑜𝑛𝑠 𝑥 𝑆𝑒𝑡𝑡𝑙𝑒𝑚𝑒𝑛𝑡_𝐴𝑟𝑒𝑎_𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 (1)
where
𝑆𝑒𝑡𝑡𝑙𝑒𝑚𝑒𝑛𝑡_𝐴𝑟𝑒𝑎_𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 = 𝑆𝑒𝑡𝑡𝑙𝑒𝑚𝑒𝑛𝑡_𝐴𝑟𝑒𝑎 / 𝑇𝑜𝑡𝑎𝑙_𝑙𝑎𝑛𝑑_𝑐𝑜𝑣𝑒𝑟 (2)

Figure 1 Total Area of Predominantly Rural Regions

Figure 2 Total Area of Predominantly Rural Regions (Geographical mapping)

The Total_Area_of_Predominantly_Rural_Regions is based on EUROSTAT data of

predominantly rural regions (based on NUTS 3 regions) (2016) in the following map.
 Figure 3 Urban-rural typology map (NUTS 2016)

In the following sections, the technoeconomic methodology is described more

analytically.

3.1. Demand forecasts

The Tonic model, which was developed within the IST-TONIC project, was chosen
and provided reasonably accurate fitting over historical data related to high-technology
products [9], [10], [11].
The demand model is defined by the following expression:
 𝑀
𝑌(𝑡) = (3 )
(1 + 𝑒 𝛼+𝑏∗𝑡 )𝑐
where Y(t) is the demand forecast at time t and M is the saturation level of the
penetration, which is estimated a priori. The parameters α, b, and c, are estimated by a
stepwise procedure, attempting to value these parameters using nonlinear regression
[12].
The following diagram shows the predicted number of users in percentage rate (service
penetration %). The network penetration is expected to reach 58,6% of the population
in 2030.

Figure 4 Predicted number of users (service penetration %)

Moreover, it is considered that during the 8 years, the number of users of the Gold
bundle continues to increase, however, those of the Bronze bundle decrease. The
following diagram shows the two on-demand curves that correspond to the two bundles
as a percentage of the predicted number of users, the blue curve corresponds to the
Bronze bundle, the orange curve to the Gold bundle.
Figure 5 Bundles service penetration

3.2. Pricing Model

Regarding the pricing, we suggest two different scenarios in which the tariff follows a
linear evolution of monthly Average Revenue Per User (ARPU) during the 8-year
period depending on the bundle of services selected. Specifically, the Gold bundle costs
80€ per month in 2023 and gradually decreases to 60€ in 2030. The Bronze bundle costs
35€ monthly in 2023 and gradually decreases to 25€ in 2030.

Monthly ARPU
90.00 €

80.00 €

70.00 €

60.00 €

50.00 €

40.00 €

30.00 €

20.00 €

10.00 €

0.00 €
2023 2024 2025 2026 2027 2028 2029 2030

Bronze Gold

Figure 6 Bundles monthly ARPU linear evolution

 3.3. Technoeconomic Indicators
The net present value (NPV) describes today’s value of the sum of resultant discounted
cash flows (annual investments, running costs, revenues, etc.), or equivalently the
volume of money expected over a given period of time. If the NPV is positive, the
project is acceptable, and it is a good indication of the profitability of an investment
project, taking into account the time value or opportunity cost of money, which is
expressed by the discount rate [12],[13].
The internal rate of return (IRR) is the interest rate resulting from an investment and
income (resultant net cash flow) that occur over a period of time. If the IRR is greater
than the discount rate used for the analysis, the investment is profitable. The IRR gives
a good indication of the value achieved with respect to the money invested.
The cash balance (accumulated discounted cash flow) curve generally goes negative in
the early part of the investment project because of initial capital expenditures. Once
revenues are generated, the cash flow turns positive, and the cash balance curve starts
to rise. The lowest point in the cash balance curve gives the maximum amount of
funding required for the project. The point in time when the cash balance turns positive
represents the PayBack Period (PBP) for the project.
Furthermore, the costs of the network components are used to calculate investments for
each year, Capital Expenditure (CAPEX).

3.4. Model assumptions

For the purposes of this study, the weighted average cost of capital (WACC) is set to
5%. The taxation is set to 20%.
Regarding the dimensioning of the network, it is assumed that there is only one provider
that covers the whole area. The number of 5G network components (macro cell, small
cell etc.) are set according to the following criteria:
✓ FWA Macro cells are 6-sector with a range of about 1km
✓ The existing Macro sites are upgradable at a percentage rate of 80%
✓ The existing Macro sites which are connected to fiber cover a percentage of 70%
✓ The Customer Premises Equipments (CPEs) are outdoor antennas
It is worth mentioning that the percentage of Existing Macro sites connected to fiber is
one of the most important parameters for the viability of the investment.
For the purposes of this study, the inCITES TEN web application was used with the
addition of upgrade modules (https://www.incites.eu/products-and-services-ten-web-
app) .
 Figure 7 5G FWA network architecture

4. Results and discussion

The following tables and figures include a synopsis of the results.
Table 2 summarizes the economic results for each of the 24 European countries.

Table 2 .European countries technoeconomic indicators

Payback IRR CAPEX per

Countries NPV (€)
year (%) Household
Austria > 2030 -7.54 -358,387,671 473
Belgium > 2030 -6.63 -146,886,762 477
Bulgaria 2028 25.30 177,391,258 216
Croatia > 2030 -7.52 -132,634,818 496
Czechia 2029 17.68 254,118,643 251
Denmark > 2030 -1.24 -121,964,557 406
Estonia > 2030 -23.98 -199,516,680 806
-
Finland > 2030 - 2,058,058,425 1567
-
France > 2030 -22.25 5,643,915,971 462
-
Germany > 2030 -5.76 1,369,760,049 376
Greece > 2030 -17.37 -535,772,874 628
Hungary 2029 10.71 91,710,077 299
Ireland > 2030 -20.78 -505,822,835 698
Italy 2029 10.31 306,869,530 285
Latvia > 2030 -8.97 -76,175,011 525
Lithuania 2027 39.51 150,233,752 167
Netherlands 2025 109.72 296,991,616 103
 -
Poland > 2030 -9.24 1,123,713,669 442
Portugal > 2030 -22.00 -741,220,284 699
Romania 2030 1.04 -185,959,270 363
Slovakia 2029 8.92 44,946,973 315
Slovenia 2030 0.75 -25,578,892 396
Spain 2029 8.77 129,802,374 305
Sweden > 2030 -10.77 -445,182,474 518

4.1. Payback Year

The following diagram shows the Payback year for 10 of the 24 countries which have
values less or equal to 2030. We notice that the Netherlands has the earliest Payback
year i.e., 2025, Lithuania and Bulgaria follow with values 2027 and 2028 respectively.
The same Payback year, i.e., 2029 have five countries, Czechia, Hungary, Italy,
Slovakia and Spain. Romania and Slovenia follow with Payback year 2030.

Payback year
2031

2030

2029

2028

2027

2026

2025

2024

Figure 8 European countries Payback Year

Table 3 shows the order of the European countries according to the Household (HH)
density from the highest value to the lowest. The same values are also depicted in the
diagram of Figure 12. We notice that the countries with the highest household densities
have the earliest Payback year.
Table 3 European countries order according to HH density

EU Country HH density
Netherlands 5219.228
Lithuania 1366.995
Bulgaria 924.2083
Czechia 745.0826
Italy 630.1928
Hungary 593.0988
Spain 576.9625
Slovakia 554.5565
Romania 464.8115
Germany 445.4047
Slovenia 419.2797
Denmark 405.5307
Poland 366.518
France 348.1304
Austria 338.7325
Belgium 335.3087
Croatia 321.1652
Sweden 305.2837
Latvia 300.6748
Greece 245.4727
Ireland 218.0395
Portugal 217.7974
Estonia 186.3195
Finland 91.78979

4.2. NPV - IRR

The following diagrams show the IRR and NPV values for the 24 countries. It is noticed
that the best values are obtained for the following countries: the Netherlands, Lithuania,
Bulgaria, Czechia, Hungary, Italy, Slovakia and Spain.
 Figure 9 European countries IRR

Figure 10 European countries NPV

If we compare the results with Table 3, we notice that the countries which have NPV
positive and IRR greater than the discount rate are the countries with the highest values
of Household density.
 4.3. CAPEX per Household

The following diagrams show the CAPEX per Household and the Household density
for each European country in an alphabetical order.

Figure 11 CAPEX per Household

Figure 12 European countries Household density (per km2)

It is noticed that the European countries with higher values of Household density have
the smallest values of CAPEX per Household and vice versa.
It is obvious from the obtained results that the European Commission has to adjust the
subsidization policy and support to a greater extent the European countries which have
low Household densities in the rural areas. Otherwise, there will be differentiation in
the offer of network services and the creation of European citizens of two categories.
The results (Cash Balances) obtained during this study are included analytically in
Appendix A.

5. Conclusions
The world is ready to change with the introduction of the fifth generation of
technologies for telecommunications networks around the world. 5G and especially the
standalone solution is ready and will result in faster data speed, low latency
telecommunications and higher bandwidth, which will help improve the experience of
consumers and commercial users, from cloud games to telehealth use cases. 5G will act
as a catalyst for the integration of technologies such as artificial intelligence, robotics,
3D printing and the Internet of Things.
The results of this study help operators to identify the differences, advantages and
disadvantages that arise during the implementation of 5G Standalone Fixed Wireless
Access networks in rural areas with different household densities.
The Net Present Value, the Internal Rate of Return and the Payback year have been
estimated as well as the investment (CAPEX) costs for each of the 24 European
countries.
The results derived in this study are:
1. The countries with the highest household densities have the earliest Payback year.
2. The countries which have NPV positive and IRR greater than the discount rate are
the countries with the highest values of Household density.
3. The countries with higher values of Household density have the smallest values of
CAPEX per Household and vice versa.
4. The European Commission has to adjust the subsidization policy and support to a
greater extent the European countries with low Household densities in the rural
areas.
The results aim to contribute to the debate over network evolution scenarios among
academia, industry, regulators, policy makers, governments.

ACKNOWLEDGMENTS
The work described in this article has been funded by the Special Account for Research
Grants of the National and Kapodistrian University of Athens (N.K.U.A.).
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Appendix A

Figure 13 Cash Balances (France, Germany, Poland, Finland, Portugal,

Romania, Italy)
Figure 14 Cash Balances (Estonia, Hungary, Czechia, Slovakia, Latvia, Slovenia,
Bulgaria, Lithuania)

Figure 15 Cash Balances (Sweden, Greece, Austria, Ireland, Spain, Denmark,

Belgium, Croatia)