In Building Wireless Wireless

4 Most Common Funding Models For In-Building Wireless Solutions

4 Most Common Funding Models For In-Building Wireless Solutions

12 April 2018 | Reading Time: 4 minutes

In-building wireless solutions can provide enterprise spaces with the indoor connectivity and quality of service that is increasingly required today. And, thanks to evolutions in technology, IBW is an increasingly viable solution to implement.

So once an IBW plan and business case have been created and approved, what financial options are available, and how should that investment be justified?

With IBW there are multiple options when it comes to funding. Below we look at some of the more common funding models for IBW solutions, as well as some of the ways that they can be combined to create more appealing options.

4 Common IBW Funding Options

Funding model 1: Funding by wireless operators 

As one of the more optimistic models for small to mid-sized enterprise spaces, an operator-funded solution may cost nothing to the enterprise itself. However, these are typically only offered to the most profitable / large venues such as stadia, because a space of this nature will be able to provide fast, significant ROI for the operator, even in situations where they carry different operators’ traffic in addition to their own.

In other instances however, operators may negotiate to provide single-operator IBW solutions for smaller, less lucrative enterprise spaces, though of course, these will only support that one operator’s network. This may be a viable solution for some IBW setups, such as when only company-issued devices (all running on the same network) will be used. However this will only occur in a small minority of enterprise scenarios.

For small to mid-sized enterprise environments, the operator-funded model is increasingly rare, as tight competition forces operators to focus expenditure on other business-critical areas.

Funding model 2: Engaging with a neutral host 

Neutral host companies can provide a low, or no-cost IBW connection, as long as they can be confident that they will recover sufficient ROI.

Neutral-host companies are the third-party providers of DAS and small cell solutions that support multiple operators and then bill those operators for IBW access. It’s the volume of this access that determines whether a solution investment will be of value to a neutral host as they need to ensure that the chargeable volume of traffic will be enough to secure ROI.

This is a limitation that is reflected in contracts with such third parties and there will, typically, be a clause defining positive ROI as a required consideration of continued operation, alongside the rights to control the physical IBW infrastructure. But, despite these requirements the relatively low enterprise CapEx and OpEx involved, mean that this tends to be an appealing option for enterprise environments.

Funding option 3: Internal funding by the enterprise

Enterprise funded IBW solutions offer optimum control, yet will often carry the steepest costs.

Essentially with this model, enterprises are offered a ‘you buy it, you install it’ scenario, though maintenance and monitoring may be outsourced. Here, the operator will maintain responsibility for the RF signal source (unless deploying a small cell, in which case the radio is part of the infrastructure and may be funded by either the enterprise organization or the operator).

Enterprise-owned IBW can be built to support as many carriers, technologies and bands as required. This presents an advantage when the IBW solution must support a variety of device types across multiple operator networks – for example in spaces where tenants and visitors will bring their own devices, such as workplaces or retail spaces.

When assessing the investment required, enterprise organizations should also consider that more modern IBW solutions can be integrated with traditional IT infrastructure, using high-end network cable instead of more expensive coaxial cable for horizontal runs. As a result, this can mean that the building is already wired with the required IT cable, and create a more favorable cost advantage.

Overall, this model incurs the greatest CapEx and OpEx obligations. The enterprise may have to commit to funding operator agreements to approve their DAS source, install a base transceiver station or repeater, or to integrate their small cell radio directly into their networks. However, there are often opportunities to recoup some of these costs with a mixed funding model.

Funding option 4: Mixed-funding models 

Sometimes the most practical solution will not fit one of the three options outlined above. And when we consider the many ways in which an IBW solution can be split up into its operational connections, components and functions, it can make sense to spread ownership and responsibilities with a mixed-funding model.

In most cases, the mixed model will arise as a result of funding across three different areas:
• The active IBW equipment
• The passive transport of the signal
• The RF signal source for the DAS, or the integrated radio for the small cell

Regarding the signal, no matter whether an IBW solution is DAS or small cell, at its core it is essentially an extension of an operators’ radio network, so must be provided with an RF signal source;
DAS solutions will require a base station or off-air repeater to connect to the macro network
Small cells have their own radio sources, which must be integrated into the macro network via a fiber-optic or point-to-point microwave backhaul solution.

In scenarios where a base transceiver station (BTS) or off-air repeater is the signal source for a DAS, the operator will generally assume the cost for that part of the network, while the enterprise owns the internal distribution infrastructure. This assumes that the operator expects to generate positive ROI in its BTS or repeater investment.

Another option with a mixed funding model, is the idea of a neutral-host company investing in the IBW infrastructure, and contracting with multiple operators to handle traffic, with no ownership, responsibility or investment on the part of the enterprise. This, however, is uncommon, owing to the revenue conditions that would need to exist for such an arrangement to be viable.

Defining the Right Funding Model

For enterprise organizations, IBW is of course an investment, but it is not necessarily one that must be carried by them alone.

Whether enterprise funded, neutral-host driven, operator funded, or a unique mixed arrangement of funding, options are available to develop the best model and ROI dependent on the situation. Importantly, these options and alternatives should always be investigated at length by the parties involved, to ensure the right-fit.

For infrastructure experts, maintaining up-to-date wireless training will provide an advantage and insight into what options are best for which scenario, enabling them to offer best advice on funding, deployment and much more. 

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