Mobile Backhaul Upgrades Deemed Essential

In an interesting research report from ABI Research, Mobile Backhaul Analysis: Global Trends and Opportunities Revenue, CAPEX and OPEX for T1/E1, Microwave, Ethernet over Copper, Ethernet over Fiber, and CATV, they draw attention to the imminent need for significant investment in backhaul capabilities, if carriers are to deliver on the promise of 3G and WiMAX technologies.

Having recently secured licensed spectrum in four key markets (Atlanta, Georgia; Los Angeles, California; Miami/Fort Lauderdale, Florida; Philadelphia, Pennsylvania / Wilmington, Delaware / Trenton, New Jersey) and announced a new range of Ethernet-based high capacity service plans utilizing licensed wireless spectrum, NextPhase Wireless is particularly well positioned to take advantage of this market opportunity.

In order for mobile operators to deliver the expected bandwidth of 3G and newer technologies, backhaul is critical,” says ABI Research senior analyst Nadine Manjaro. “Backhaul is a major contributor to network performance and cost, and operators should design their networks to meet peak traffic demand – not just average usage levels.”

Service provider testing shows that end-user data rates and the number of active subscribers served per sector vary greatly, based on the backhaul technology employed. For example, as T1 reaches near capacity, the network performance degrades by over 40%. But some operators believe that traffic usage is bursty, so a single T1 is sufficient to support a 3G cell site backhaul.

In a recent study, ABI Research forecasts global CAPEX for backhaul to increase from $14 billion in 2007 to $23 billion in 2012. OPEX also is expected to rise from $1 billion to $6 billion during the same period.

“As a result, operators should be focused on solutions that will meet their performance requirements with the minimum CAPEX and OPEX,” Manjaro explains. In 2007, T1/E1 and microwave backhaul became the two largest contributors to CAPEX and OPEX. ABI Research recommends that operators focus more on Ethernet-based solutions, including Ethernet over fiber and Ethernet over copper solutions, to optimize costs.

“In 2012, there will be a more distributed mix of backhaul technologies across the various options,” continues Manjaro. “However, microwave is expected to be the primary backhaul solution in all the regions studied, except Latin America and North America.

“Ethernet over fiber will be a very popular choice for upgrades between now and 2012, primarily due to its lower cost per megabit and high data rate, compared with other backhaul options.”

As operators upgrade their networks to meet growing bandwidth demand, they are upgrading to Ethernet-based solutions in both wired and wireless backhaul. The location of cell sites in existing service-provider infrastructure, bandwidth requirements, alternate carriers, interface requirements, and other factors all play a role.