RFCAPEX vs OPEX: Key Differences Explained
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This page compares CAPEX vs OPEX and highlights the key differences between them.
CAPEX stands for Capital Expenditure, while OPEX stands for Operational Expenditure. These represent distinct procurement models commonly used by telecom operators.
Both CAPEX and OPEX have their own advantages and disadvantages. Selecting the optimal model requires a thorough analysis of financial, operational, and strategic factors. While a CAPEX-based procurement model for green power was traditionally the preferred choice, OPEX-based procurement models have gained significant traction in recent years.
In the OPEX model, a third-party ESCO (Energy Service Company) makes the initial CAPEX investment. The operator then pays solely for the energy they consume.
The following table summarizes the key differences between these two approaches:
| Specifications | CAPEX | OPEX |
|---|---|---|
| Financial Analysis | Operator needs to invest all CAPEX (either using internal funds or external financing). Therefore, the financial risk rests with the operator. | Operator does not need to invest in CAPEX. Hence, there’s no financial risk associated with deployment. |
| Operational Analysis | All day-to-day operations are the responsibility of the operator. The operator bears all costs associated with site operations. | Site operation is the responsibility of the ESCO. The operator doesn’t need to allocate resources for site operation and only pays based on pre-defined energy usage rates. |
| Strategic Analysis | Maximizing utilization of available assets and engaging multiple third parties often leads to a complex model for operators to manage at the last mile. | Easier to control last-mile performance, as the ESCO is the single point of contact and responsible for last-mile operations. |
