Saudi Arabia, one of the richest countries in the world, achieves mobile connectivity penetration of up to 181% and has considerable demands for mobile Internet. 400 million YouTube clicks are generated every day and 150 million Twitter posts a month, the highest on the planet, creating a huge MBB market space. 

A new way to enrich site resource

Sites are critical resources for MBB development. However, site density in Saudi Arabia is far lower than that in other developed MBB markets, such as China, Japan, and South Korea. The majority of telecom operators face difficult site acquisition, high construction costs, and frequent site loss, which seriously restricts the development of MBB networks.

Currently, Saudi Arabia has 30,000 physical sites. Site acquisition involves a series of complex procedures including negotiation with proprietors and approval from multiple departments, such as municipal and electricity departments. On average, site acquisition exceeds six months and the total cost of ownership (TCO) of a traditional macro base station can reach USD$320,000 within five years. Approximately 5% of sites also require replacement each year due to the expiration of proprietors' contracts, which leads to high site loss and additional service costs.

Huawei's marketing insight estimates Saudi Arabia has approximately 1.5 million public street lamp poles, which are extensively distributed and can serve as potential optimal site resources for network construction. The country is proactively building a smart city, which requires smart neural networks to provide seamless coverage. Thus, sites deployed on street lamp poles can be regarded as nerve terminals in the vast neural network. Nonetheless, the authorization to use the sites must be approved by the Saudi Arabian Government, which adds additional time and difficulty to site acquisition.

How to obtain the Government's approval to help operators reduce costs and facilitate batch site acquisition?

A Smart City by Lamp Pole Renewal

An opportunity emerges when the Saudi Arabian Government plans to reconstruct street lamps.

The Saudi Arabia's existing public lighting system consumes up to 400 W per street lamp, each requiring replacement bulbs every one to two years. This generates high operating expenses (OPEX). Although the Government is eager to save energy, global oil price drops and a limited budget for public affairs has so far prevented large-scale reconstruction, forcing them to endure the costs.

Huawei grasped this opportunity to proactively seek partners and attract public contribution to municipal infrastructure construction. Huawei collaborated with a smart control and energy conservation solution provider (hereinafter referred to as the partner) to propose the following new business model to achieve multilateral benefits:

1)The Government and the partner adopted a Public-Private Partnership (PPP) cooperation model. The partner assisted the Government, for free, in reconstructing the public lighting systems reducing the power consumption of each street lamp to 200 W and extending the service life of each bulb to 10 years. The Government used the Pay As You Save (PAYS) method to share the large amount of saved OPEX with the partner in return. In addition, the Government authorized the public street lamp pole infrastructure development company to implement ICT transformation, in order to maximize value. The reconstructed smart street lamp poles can provide diverse services for the smart city, such as video surveillance, digital billboards, and IoT services. The Government also implemented strategic cooperation with telecom operators to provide ubiquitous site resources for seamless MBB coverage.

In conclusion, the Government introduced market practices to public resources to reconstruct street lamp poles for free and help build the smart city. This improved citizens' satisfaction, enhanced ICT level and competitiveness, and maximized value of idle street lamp poles.

2)Huawei and the partner assisted the Government in building the smart city, and jointly developed a customized smart street lamp pole solution to provide diversified ICT services for operators and enterprises. Huawei is capable of providing end-to-end (E2E) solutions and comprehensively understanding customers' requirements, based on decades of in-depth technology research, successful commercial deployment, and abundant delivery experience in the IoT field. Huawei proposed the use of ubiquitous smart street lamp poles as a core element of the smart city to help the partner obtain the support and approval of the Government. As a result, the POC test application for smart street lamp poles was successfully approved by the Government within two months.

3)The partner and operators engaged in strategic cooperation to contribute to the customized smart street lamp pole solution, ensure the availability of lamp poles for network construction, and rent lamp poles and auxiliary facilities in batch. As a result, operators only needed to assume regular site rentals while saving a large amount of capital expenditure (CAPEX) in site acquisition, civil engineering, electric power, and transmission. This significantly improved network investment efficiency through reduced investment in telecom equipment and services.

From 6 Months to 1 Month, From 320K USD to 200K USD

Based on site acquisition requirements and analysis of the TCO, Huawei released the Lite Site agile network deployment solution using street lamp poles. An E2E integration of industry chains and an innovative business model contribute to the close cooperation between the Saudi Arabian Government and the launch of the country's first integrated smart street lamp pole solution. The design of integrated street lamp poles supports embedded installation of communication equipment and provides multiple environmentally-friendly functions. 

Site bases are prefabricated to exclude onsite concrete operation and drastically shorten the installation to just two days and the overall site deployment to one month, including lamp pole production and site acquisition. In comparison, a traditional macro base station requires more than six months for site deployment. Thus, the overall site construction cost decreases from USD$320,000 to USD$200,000 within five years, helping operators reduce the TCO.

According to the first trial verification, the Lite Site successfully increases the total traffic by 20% and peak rate from 5.6 Mbps to 38 Mbps. This solution was recognized by Operator Z, which has invited Huawei to implement large-scale commercial deployment as quickly as possible.

Innovative Business Models for Customers' Success

The public street lamp pole infrastructure development company is developing close cooperation with operators. 1.5 million street lamp poles in Saudi Arabia will provide a large number of favorable site resources to help operators simplify site deployment and vastly reduce the TCO.

The secret behind this successful business model lies in the identification of multilateral benefits. Although profit chains are divergent in different countries and markets, proactively achieving multilaterally beneficial results, being open-minded, and developing close partnerships will ultimately help customers' business succeed.

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