BT Group plc (NYSE: BT; London: BTA) strengthened its commitment to the controversial carrier Ethernet technology, Provider Backbone Transport (PBT), today by announcing a major wireless backhaul services deal with T-Mobile (UK) . (See T-Mobile Picks BT and PBT: New Kid on the Metro Block.)

The British incumbent announced it has struck a five-year managed services deal "potentially worth several hundred million pounds over the next five years" to link thousands of T-Mobile UK base stations to the mobile operator's core network.

Leased lines will be used to backhaul T-Mobile's traffic until an "Ethernet-based service is introduced," although BT hasn't indicated when that service might be ready.

A BT spokesman confirmed today that the wireless backhaul service "will be a PBT-based Ethernet product."

PBT, also known as PBB-TE (Provider Backbone Bridging - Traffic Engineering) in the Institute of Electrical and Electronics Engineers Inc. (IEEE) standards process, is a pre-standards technology that enables deterministic point-to-point Ethernet transport tunnels with SDH-like management characteristics, according to its supporters, who claim it offers a more cost-effective and scaleable alternative to MPLS. (See PBT's Ethernet Appeal.)

BT says the new Ethernet service will "provide T-Mobile with the network capacity required to support future bandwidth hungry mobile services based on High Speed Downlink Packet Access (HSDPA) technology. These include Mobile TV and music and video downloads." The carrier also says the Ethernet service will be "designed and built to be fully compatible with BT's 21st Century Network (21CN)."

BT has been talking about the role PBT will play in 21CN, its £10 billion (US$20.5 billion) next-generation network, since it announced in January it had ordered PBT technology from Nortel Networks Ltd. and Siemens Communications Group, now part of Nokia Networks . (See PBT Stars at Ethernet Expo , BT Pressures Vendors Over PBT, and Nortel, Siemens Win PBT Deals at BT.)

Heavy Reading senior analyst Stan Hubbard says wireless backhaul is a service that's been linked with PBT since the technology emerged onto the market last year.

"Vendors and component suppliers have highlighted wireless backhaul as a key potential application for PBT/PBB-TE because it promises a connection-oriented packet network with high quality and reliability, including sub-50ms restoration, needed to support voice services," notes Hubbard in an email.

"Industry feedback indicates a surge in wireless backhaul-related RFPs in 2007, and the PBB-TE vendors are pursuing these in both telco and MSO accounts," adds Hubbard. "I'm not surprised that BT's plans for its backhaul solution for T-Mobile include a PBB-TE element."

Hubbard's colleague Patrick Donegan, Heavy Reading's resident wireless expert and author of the report "Ethernet Backhaul: Mobile Operator Strategies & Market Opportunities," also notes the suitability of Ethernet technology in the backhaul portion of mobile network architectures. (See Carriers Face Backhaul Conundrum.)

"Ethernet backhaul is the way mobile operators need to go to ensure that mobile broadband services based on HSDPA contribute to the bottom line as well as the top line", says Donegan. "BT is relatively advanced in developing a carrier Ethernet-based mobile backhaul service proposition, but other service providers are also going to be bringing these services to market to succeed the TDM leased line business model."

Donegan notes in his report that "BT is rolling out a new carrier Ethernet network of 1,100 21CN-compliant nodes from 2007 to 2010. This will constitute a native Ethernet network based on the PBB-TE standard." That compares with BT's current 134-node Ethernet network, which, states the analyst, "cannot be considered a carrier Ethernet service, as it builds Ethernet services on top of the legacy TDM and ATM network."

The analyst also reports that BT's "early tests with PBB-TE vendors lead it to believe that PBB-TE will underpin a service that delivers all of the attributes of TDM that are essential for cell-site backhaul, but at a lower cost."

Donegan adds that by the end of this year, BT is due to have in place Ethernet services with "additional features that are of specific interest to mobile operators will be introduced, such as traffic prioritization (802.1p), traffic contention/oversubscription, and virtual private LAN service (VPLS)."

The British incumbent is not alone in developing Ethernet-based managed wireless backhaul services targeted at mobile operators. Donegan's report shows that Verizon Communications Inc. (NYSE: VZ) and Norway's Telenor Group (Nasdaq: TELN) are both developing such services, though neither is using PBT technology.

BT's announcement is just the latest sign that PBT and wireless backhaul are two of the hottest topics in the telecom sector today. More and more vendors are announcing PBT developments; Verizon is believed to be considering adding PBT requirements to a major RFP; and Huawei Technologies Co. Ltd. is rumored to have made a bid to buy Carrier Access Corp. (Nasdaq: CACS) as a way of furthering its wireless backhaul ambitions. (See PBT Parties On, Nortel Wins Dakota PBT Contract, Nortel Pushes PBT Pact, Verizon Preps God Box RFP, and Huawei M&A Rumor.)

— Ray Le Maistre, International News Editor, Light Reading

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