Cognitive Radio: The value Chain

The term value-chain is used to describe the interconnected stream of organizations, activities, and capabilities that combine to generate value for customers through the production of goods and services Value is typically measured in terms of revenue for the organizations within the chain, and in terms of utility for the customers. Utility is the economic term for the satisfaction derived by customers in the consumption of goods and services. In value-chains, any party that gains utility from the chain activities (whether by consumption or other means) should be considered a customer. Organizations contribute to the value of the goods and services through their activities, and generate profits by minimizing their costs and maximizing revenue, i.e. maximizing the value provided to the next organizational downstream in the chain. For the customers, the goods and services are consumed, generating utility for the customers in excess of the cost. In cellular wireless markets for example, the value of advanced high-speed video download services may not be evident to the end user until after the handset is paid for. The cost of the advanced handsets may be subsidized by the service provider or even the content provider in order to encourage the uptake of these services. With push advertising on a cellular phone being used to pay, in whole or in part, for a service consumed by the handset owner, both the advertising company and the ultimate end user are customers.

The figure above is an example of one value-chain that can be associated with a cognitive radio system. The value generating elements in this chain include cognitive functionality, dynamic spectrum access, ease of communication, and abilities to develop and deploy new applications and services with relative ease compared to a traditional fixed-architecture system model. The cognitive functionality element of this chain offers value by combining awareness, decision-making and learning capabilities with the ability to rapidly implement change in both reactive and preemptive modes of operation based on current and historical knowledge of the user’s habits and anticipated communications needs. This allows the burden of modification and optimization of the system performance to be moved away from the user to the device itself.

Cognitive functionality also provides a way to work around and fix faults that may develop in the device. In addition, this functionality can help maximize the operating lifetime of the device itself by attempting to reach a compromise between the available node resources (e.g. remaining energy, available spectrum, RF hardware) and communications demands placed on the device by the user. The value that can be derived from a more dynamic approach to spectrum access as featured in the second element of the figure above, is that the probability of successful wireless communication can increase dramatically. Dynamic spectrum access techniques combined with cognitive functionality offer a means of exploiting unused or under-utilized whitespace spectrum segments while attempting to ensure that incumbent and non-cooperative users experience minimal interference.

This ability enables the cognitive node to take advantage of the geographical and time-of-day variations in spectrum usage patterns for its own needs. From the user’s perspective, the ability to communicate becomes a feature that is taken for granted as the underlying cognitive functionality and dynamic spectrum access technologies can automatically manage the spectrum access requirements. The third element of this value-chain is therefore the ease of communication that users can experience regardless of the geographical location, movement patterns, time of day, and user’s technical knowledge (or lack thereof). The fourth and final element in this simplified value-chain is the value that can be derived by combining all of these features to enable both the service providers and users to quickly develop and deploy innovative revenue-generating services and applications. These new services can be both pushed onto the market by the service provider or user, and optimized quickly based on the subscriber’s interest in these services in order to maximize the generated revenue.

In addition to the consumers, other non-consuming customers such as a telecommunications regulator may get value from the chain. The regulator gains utility from the creation of a telecommunications regime that meets the defined regulatory standards, which may be considered a measure of societal value. For example, frequency spectrum regulators may reserve spectrum for emergency services because of the value of such services to society. Communications regulators also impose terms and conditions on telecommunication network operators as regards the percentage of the population covered by basic services such as mobile voice connectivity.