Where do I set up my business case assumptions?
Monthly location revenue inputs can be set using the ARPU Manager.
Inputs governing the financial/business model, such as operating margins, discount rate, churn, etc. are set in the ROIC Manager..
For complete list of available settings, please consult Resource Managers User Guide’s pages dedicated to ROIC manager.
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How do I enable Telecom Spend Matrix (TSM) ARPU usage for Business/Enterprise modeling?
Go to your ARPU manager and select Telecom Spend Matrix strategy next for desired target endpoints.
For US-based Arrow deployments, users have two options for specifying fair share of target endpoints. By default, the tool is going to leverage latest available FCC’s Broadband Data Collection fabric information (provider presence, technolgy, coverage, and maximum available downlaod speed) for Residential and Small Business targets, or provider fiber route presence sourced from Geotel for Enterprise and Tower targets to calculate expected fair share of each location. More on this process can be found in Fair Share and Penetration Calculations guide.
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Users also have the ability to specify the exact fair share value that the tool should use for each endpoint. Whenever location-level override is present, the tool is going to use it over the FCC/Geotel-derived fair share value. Details on how to set up locations layer with this override can be found in Locations chapter of Data Preparation Guide.
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For Arrow plans run outside of the USA, users should use location-level fair-share overrides. Otherwise, in the absence of competition data, all locations will have implicit fair share of 100%, resulting in overstatement of the revenues planned network could generate.
How and where can I set up my monthly ARPU inputs?
Arrow’s ARPU Manager is used to define ARPU strategy for each endpoint type (e.g. Global, Location Layer, TSM, Segment).
- When “Global” strategy is selected, user can specify desired ARPU value directly in the manager.
- “Location Layer” strategy should only be used for locations layer(s) that specify every location’s monthly revenue via dedicated attribute.
- “Telecom Spend Matrix” (TSM) strategy should only be used in combination with Telecom Spend Matrix Resource Manager that defines addressable business sizes, industries and telecom product.
What is the difference between cat3 and cat7 categories in resource managers?
cat3 category is used to specify Business-as-Usual (BAU) financial inputs, to allow Arrow to calculate how the existing legacy network is going to perform, in the absence of any new investment, i.e. “What will happen if I do nothing.”
cat7 inputs correspond to the Planned Network generated in Arrow optimization, i.e. “How is the planned network going to perform.”
cat3 inputs are only relevant in brownfield scenarios and are used to determine net impact of the planned network, after factoring in any potential cannibalization of the legacy network revenues.
How do I set up BAU (Business-as-Usual) case in Arrow?
BAU case inputs in Arrow is governed by cat3 category inputs found in both ARPU and ROIC manager.
When setting up BAU inputs, user should leverage known performance metrics of the legacy business. For example:
- set cat3 ARPU to current legacy network’s ARPU
- set cat3 starting penetration to the current penetration level, and allow it to change over time (by adjusting “penetratioRate” ROIC setting to -0.25 to -0.4 range [most common])
- set cat3 operating margins, churn, connect costs, etc. to match current legacy network’s performance metrics
This process needs to be repeated for each target endpoint type.
Where do I change discount rate used in NPV calculations?
Discount rate used in plan is set in a ROIC Manager, on “Configuration” tab, under “Discount Rate” field.
Broadband Adoption setting is intended to simulate population’s propensity to purchase any broadband product, effectively acting as a haircut between total number of addresses that the new network passes, and how many of those addresses are revenue-generating (i.e. addressable locations).
For example, a fiber network passing 100 addresses, with 90% broadband adoption, is going to be show up in Arrow as 100 points that need to be connected (100 ports incurring capex), but only 90 Premises with revenue-generating potential. Capturing 100% of prospects in such area equates to capturing revenues from 90 subscribers. Similarly Customer Penetration is calculated off the base of addressable premises (90 in this example).
Housing Unit Occupancy Rate, while not available as separate setting in Arrow, can be combined with Broadband Adoption to derive a combined haircut from total housing units passed by the network and the number of potential customers.
How do I model subsidies in Arrow?