Reducing Network Operators’ Expenses by Adjusting the MTTR

Network operators have to generate sustainable profits from the sale and provision of network connections. However, due to quickly growing bandwidth requirements and stagnating revenues, this becomes increasingly difficult to achieve. Lowering expenses is a proven remedy in such situations. The major part of a network operator’s expenses is related to the provision of network connections and, in particular, their quality of service (QoS) in terms of availability. Here, an important aspect is the repair of network components to restore connectivity in case of failures. Lowering expenses for network repair clearly results in a reduction of total enterprise expenses. However, it also results in an increase in compensation payments because availability guarantees will be violated more frequently. This paper explores the trade-off between the reduction in repair-related expenses and the corresponding increase in compensations. To this end, a general financial model is developed which considers the described trade-off. The model involves corporate key figures, a cost function that associates repair-related expenses with the mean time to repair (MTTR), and a probabilistic estimation of the expected compensations. Using exemplary model parameters, we show that the increase in compensations typically does not outweigh the reductions in repair-related expenses. Consequently, significant expense reductions are possible for network operators.