Traffic estimation methodologies to determine wireless site profitability

Accurately estimating the return on investment of a cellular or PCS transmitter site has been a longstanding problem that all wireless companies face. A sites return on investment is directly related to the amount of phone calls it processes, and the revenue generated is difficult to know ahead of site implementation. Since revenues are directly related to traffic, this case study will examine traffic estimation methodologies for site placement. The methods of calculating the return on investment of a site are based on population in the area, the number of sales of phones in zip codes in the area, the number of cars per day on nearby roads, and the area the site covers. All cellular and PCS companies attempt to do this in order to try to make their companies profitable. The driving force behind site profitability analysis is avoiding low revenue producing sites. The construction costs for a site are usually anywhere from $150,000.00 to $300,000.00. Placing a site in a location that yields a high amount of usage and high revenues allow this initial investment to be paid off quickly. Conversely, placing a site in a location that yields a low amount of usage and low revenues causes the initial investment to be paid off slowly, or not at all.