586. Sanjar Iyer, How to Analyze a Telecommunications Company

Sanjay Iyer, a consultant for 25 years, discusses the evolution of telecommunications companies, focusing on network, infrastructure, quality, and coverage analysis. He explains that coverage is the first aspect of a network, determining the reach and number of homes it can deliver service to. The structure of networks has evolved over the years, with different types of networks for broadband, such as fiber to the home, hybrid fiber coax, and fixed wireless axis.

Assessing the Infrastructure Quality

Sanjay explains the process of assessing the infrastructure quality of a telecommunications company, which involves evaluating speeds, latency, and other factors such as the density of homes in the neighborhood. Speeds are rated at megabits per second, but factors like the number of people using television, density of homes, and latency can affect the speed of upstream and downstream packets. Latency is another factor that covers systemic network design quality. Sanjay also mentions that there are temporary issues in a coax network, such as fluctuation noise and overhead versus underground cables. To understand the total quality of a network, it is essential to separate temporary issues from systemic problems. He suggests measuring the quality at a home level, rather than at the broad network level.

Network Assessment Factors

Sanjay explains the importance of assessing network outcomes such as latency and speed when buying a provider and explains why companies should focus on outcome metrics and infrastructure quality. He talks about the first and second metric, capital expenditure efficiency and network upgrades. Sanjya explains why getworks have been continuously groomed and expanded to deliver more bandwidth over the years, and understanding how they have done it historically and what it will take to achieve the gold standard of one gigabits per second downstream to every home is crucial and what it would cost. 

Challenges Faced when Analyzing Networks

The conversation turns to the  challenges companies face in analyzing their own networks, as there is no single source of truth for determining their network coverage. One challenge is the cost of bandwidth, which can be expensive and unpredictable. To get the bandwidth right, companies must calculate the capex efficiency model, which assumes an average number of households per node and exploits it to the entire country. This model is often incorrect, leading to unpredictable network costs. Another challenge is fiber optic and broadband penetration analysis. The Federal Communications Commission has created a national database that tracks every household's speed and coverage from service providers. This information is publicly available and can be used to analyze homes and serviceable locations. The FCC has also created a service coverage map at a national scale, which can be used to allocate government capital to underserved areas and subsidize network bills.

Analyzing Market Share

Sanjay  discusses the process of analyzing market share in a given market. He uses the FCC database to measure network footprint, focusing on census block group levels to determine customer penetration. Machine learning is particularly interesting as it provides insights into customer profiles, economic or household level information, which can help predict underperformance, overperformance, and areas for improvement. Iyer is currently working on building tools to predict the ROI of broadband investments, analyzing existing footprints and adjacent locations, and predicting expansion paths. He is also involved in generative AI, which is popular but not widely adopted due to issues with LLM tech adoption. Iyer is developing a governance model that looks at all aspects of Gen AI, from use cases to production and costs, and is building products with an AI-first approach, using tools like chat and GPT to develop software products based on specific requirements.

Timestamps:

04:30: Assessing Infrastructure Quality and Network Economics

08:37: Capital Expenditure Efficiency and Network Upgrades 

13:27: Challenges in Network Data Availability 

17:52: Fiber Optic and Broadband Penetration Analysis 

21:21: Customer Churn Rate and Retention Strategy

25:45: Subscriber-Based Growth and Market Share Analysis 

27:32: Sanjay Iyer's Current Practice and AI Focus 

 

Links:

LinkedIn: https://www.linkedin.com/in/sanjay-iyer/

Website: https://www.combinatree.com/

Resource: https://umbrex.com/resources/how-to-analyze-a-telecommunications-company/

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