Friday, 03 September 2010
Home
| Backhaul to the future |
|
|
| Sunday, 20 June 2010 | |
|
‘Developing’ markets show how European cellcos could avoid drowning in smartphone traffic says Lance Hiley, vice president, Market Strategy, Cambridge Broadband Networks Ltd…
In the long term, the global mobile telecoms market may evolve into a very different one from that of today’s. Regulators may focus in future on service rather than network competition and let the market ‘regulate’ the costs of services and the profits made by mobile operators. This could lead to shared LTE network investments, substantial network sharing and higher ROI that will support the rollout of additional network and service infrastructure. These are big questions that the industry’s organisations and regulators are beginning to tackle, but until resolved, mobile operators face more immediate challenges. Key among those is the capacity constraint and specifically, mobile networks’ ability to backhaul the exponential growth in data traffic. A ‘perfect storm’? For mobile operators in all markets, managing operational expenditure while maintaining adequate quality of service (QoS) to their customers is a continual challenge. The Western mobile networks were assumed, relatively recently, to be saturated markets but GPRS, then 3G and the arrival of the iPhone and other smart phone variants disproved this. However, much of the additional traffic the networks carry is very low margin and contributes little to the bottom line. The current ‘explosive’ growth in mobile data traffic exacerbates the problem. Like their cousins in fixed telecoms, many Western mobile operators initially followed the flat-rate / unlimited access model for access to data services but they now face potentially unmanageable broadband data demands, which the latest generation of mobile phones and pads will only increase. Mobile operators are in the unenviable position, therefore, of needing to significantly increase the capacity of their networks in the immediate-to-short term, supported by minimal additional revenue. Managing the demand through new charging strategies may bring a short term benefit but isn’t popular with subscribers and so few industry observers and analysts expect any sustained reduction in the rate of growth. AT&T, like other operators, recently introduced usage-related data tariffs and the strategy may well provide short term relief from their customers’ gargantuan broadband demands but like road building, traffic tends to expand to fill (and overfill) any capacity provided. It’s for that reason that the technology path to LTE now appears clear, and with TeliaSonera announcing the world’s first live 4G network in June 2010, it appears inevitable that the onslaught of multimedia service adoption will fuel further data traffic expansion. European mobile operators also face the challenges of heavy investment in legacy infrastructure and OSS/BSS and active competition. Their shareholders demand profits and may not be willing to support additional investment into expanding network capacity and their regulators outlaw network monopoly. Both CapEx and OpEx budgets need to be minimised and carefully balanced. It’s a ‘perfect storm’ of conflicting requirements. Network expansion Table 1: European backhaul CAPEX expenditure 2009-2013 ($ million) 2009: 2,504 2010: 2,598 2011: 2,632 2012: 2,689 2013:2,795 These numbers are significant and are forcing the industry to a fundamental reassessment of backhaul strategies. Using fibre for backhaul has obvious advantages since it offers almost unlimited capacity, is reliable and ongoing OpEx is low. Unfortunately, the fibre currently ‘in the ground’ can’t meet the demand and putting new infrastructure in place is very heavy on the CapEx budget, time consuming and disruptive. In some regions of the world there is very little fixed line infrastructure in any case but the demand for new mobile services has to be met. Informa Telecoms & Media predicted that African mobile data traffic would grow from 33.11 Petabytes (Pb) in 2008 to 94.21 Pb in 2012, a compound annual growth rate of 23.3%. Mobile connections are growing faster than fixed, by a factor of around 8:1. Substantial growth is also being experienced in the Dynamic duo Mobily began offering 3G services in 2007 and needed to enhance its backhaul network to support its rapidly growing user base and increasing demand for 3G services. It conducted an objective examination of the costs and benefits of the alternative technologies, from which it became clear that a microwave solution was the most suitable. Mobily invited several suppliers, among them Nasser Al-Nasser, Mobily cto, explains that capacity growth and scalability were Mobily’s primary concerns, coupled with rapid deployment of new services to be launched before their competitors. These needs demonstrated the advantage of PMP as it could provide significantly greater capacity in the same spectrum allocation and was quick to deploy. MTN Ghana, which is part of MTN Group the largest mobile operator in The evaluation resulted in a framework agreement for PMP based last-mile backhaul solutions throughout the MTN group, with the first implementation in MTN Ghana. The results were as follows: after commissioning the new eNodeB 3G elements, 3G service usage increased three-fold in the first month, backhauled by the PMP network, and traffic is still growing. The European market If money – and land way-leaves - were no object, European operators might simply build out more fibre. Longer term - if the fibre and its build cost can be shared and/or comprehensively covered by revenue - this is attractive, although not a short or even mid-term answer. In the past the E1 option was also available (simply by plugging in extra lines) but this linear upgrade approach can’t cope with step changes in bandwidth so this is no longer an option. Where network capacity exists and is not fully utilised, backhaul and network sharing agreements may provide temporary relief at no CapEx and low OpEx. Some mobile operators are undergoing full mergers, which may reduce expenditure on backhaul among other economies. This solution is neither appealing nor available to all operators. How are operators to evaluate the likely impact on their balance sheets of competing technologies? Informa Telecoms & Media has conducted some research, sponsored by CBN, to which Ericsson, T-Mobile, Vodafone and TeliaSonera contributed. Informa developed a model to calculate and compare backhaul costs in the European market. The following information derives from its ‘White Paper: Last Mile Backhaul Options for West European Informa notes that backhaul technologies will move away from E1 to alternatives and a general move to Ethernet between now and 2013. Over-the-air (OTA) backhaul is significantly more popular since its price and performance has improved; almost all Tier-1 operators use microwave to backhaul a proportion of their traffic, says the white paper. Although microwave is the most popular form of last mile backhaul in Informa’s analysis of costs and benefits considered a single PMP link to satisfy the calculation criteria and make PMP comparable with other technologies. However, PMP’s advantage is greater when several links are introduced since statistical multiplexing improves efficiency. The cost of deploying PMP microwave is lower than PTP microwave, since RF equipment for the majority of base stations are typically lower footprint and cost while the deployment cost is significantly lower per link. The depreciation period used was similar for both PTP RF and PMP, that is, seven to eight years. PMP emerged as the lowest cost option in the calculations, even with the comparison limitations described above. Newer markets, as in Africa and the With rapid growth in traffic likely to outgrow all existing infrastructure, however, operators in |
| < Prev | Next > |
|---|
|
|
|
|
|
|
|
|
|
|