Light Reading

Battling Mobile Backhaul Costs

Light Reading
3/22/2006
50%
50%

There are a lot of expectations surrounding the revenue-generating potential of new broadband cellular technologies such as 1xEV-DO for CDMA carriers and HSDPA for W-CDMA carriers. Can they deliver?

EV-DO is already delivering on those expectations, with more than 24 million subscribers worldwide. First launched by Cingular Wireless at the end of 2005, HSDPA will now be rolled out by W-CDMA carriers in a number of parts of Europe and Asia/Pacific over the course of this year. The revenue-generating potential is clear. In the U.S, for example, the major carriers have locked horns at a price point of $59.99 for "all you can eat" access to HSDPA and EV-DO services.

What's not so clear is the profit potential in deploying these capabilities. One critical factor that will determine what the numbers actually look like is the impact on the mobile carriers' backhaul networks. As discussed in Heavy Reading's latest report, Backhaul Strategies for Mobile Carriers, carriers are typically raising their backhaul spending by 15 to 25 percent to prepare their networks for the higher volumes of traffic that these air-interface enhancements are driving. This entails deploying more transport capacity at the cell sites, typically in the form of more E1/T1 leased lines or more point-to-point microwave links.

Scaling the backhaul network on the basis of this TDM-based network topology will do for now as a means of getting these services off the ground. But with data traffic volumes liable to increase two- or threefold within the next couple of years, relying on this same TDM model risks seeing the cost of carrying this traffic outweigh the new revenue potential.

The key to lowering the cost per bit of carrying data through the mobile network is the adoption of packet technology in the backhaul. While it runs counter to the trends of the wireline networking world, in the case of W-CDMA carriers, ATM is the key to reducing their backhaul costs. Many carriers have deployed ATM aggregation nodes in their backhaul networks. These serve to reduce the length -- and therefore the cost -- of leased lines or microwave links connecting the cell sites to the network.

Another approach is to terminate GSM traffic onto these ATM networks using Circuit Emulation. Within the radio access network (RAN) software, most vendors are only now starting to deploy the more data-oriented ATM QOS features that W-CDMA carriers consider the single most important tool for lowering backhaul costs.

The so-called IP RAN has already been deployed on a large scale by EV-DO carriers. Although W-CDMA base stations don't support IP interfaces yet, the world's first IP RAN for W-CDMA is already in live commercial service in Hong Kong using MPLS-based pseudowire technology. This encapsulates GSM and W-CDMA TDM and ATM traffic streams and transmits them as a pseudowire over lower-cost Ethernet backhaul. Several leading carriers are involved in trials, with the first significant commercial deployments expected in the next 12 months.

These solutions are promising but usually require additional optimization -- such as customized engineering of the Ethernet network, OAM, base station synchronization, and DSL CPE at the cell site -- in cases where carriers are looking to use DSL.

Carriers believe that the current spikes they are seeing in backhaul expenditure can be reined in again with the efficient deployment of such capabilities. The trouble is that data-savviness in mobile carrier circles is still in relatively short supply. They are pretty much on top of their packet core networks now -- their PDSNs in CDMA, their GGSNs and SGSNs in GPRS/UMTS. They are in the relatively early stages of rolling out softswitches in the voice core, with dedicated call servers separated out from media gateways.

Some carriers have deployed ATM for backhaul aggregation, but many of these continue to struggle with integrating this new layer with their SDH/Sonet networks, particularly from a network management and network provisioning perspective. For the most part, mobile carriers don't understand Layer 3 multiservice routers or Ethernet -- and certainly not enough to go running revenue-paying traffic over them with anything other than a lot of caution. And while the network planners continue to grapple with these challenges, EV-DO and HSDPA will be driving a relentless increase in traffic volumes while competition drives lower end-user prices.

The most data-savvy of the mobile carriers are probably right -- they probably can rein in these backhaul costs and make a positive contribution to sustaining current levels of profitability. The risk for others is that they will see their backhaul costs spike upwards and then stay there.

— Patrick Donegan, Senior Analyst, Heavy Reading

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
From The Founder
Light Reading sits down at CES with the head of Cisco's service provider video business, Conrad Clemson, to discuss how NFV and cloud security relate to video, the challenge of managing 4K/8K traffic, the global expansion of Netflix and virtual reality.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
LRTV Custom TV
Join Us at the Digital Operations Transformation Summit

2|4|16   |   03:52   |   (0) comments


The Digital Operations Transformation Summit on February 21, 2016 at the Crowne Plaza Barcelona Fira Centre will bring together 50 senior executives to engage in a unique debate on the opportunities and challenges presented by the transformative evolving digital landscape. RSVP now at events@lightreading.com.
LRTV Custom TV
Making the Test: ADVA Ensemble Connector vs. Open vSwitch

2|4|16   |   01:28   |   (0) comments


Light Reading, in partnership with EANTC, recently tested ADVA's Ensemble Connector, which replaces open vSwitch and offers carrier-grade capability and interoperability. The test results strengthen ADVA's credibility as a provider in the virtualization space.
LRTV Custom TV
Bridging the Gap Between PoCs & Deployment in NFV

2|4|16   |   31:50   |   (0) comments


Charlie Ashton of Wind River presents the keynote at Light Reading's 2020 Vision executive summit in Dublin.
Between the CEOs
CEO Chat With Mike Aquino

2|3|16   |   17:34   |   (0) comments


The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
Shades of Ray
MWC: Buckle Up for 5G & the IIoT

2|2|16   |   02:28   |   (0) comments


This year's Mobile World Congress looks set to be a 5G land grab and a chance to get down and dirty with the Industrial Internet of Things (IIoT) – but what will the 5G discussions actually be about?
LRTV Custom TV
Case Study: Building China's Next-Gen TV Networks

2|2|16   |   5:01   |   (0) comments


With over 2 billion viewers worldwide, Shenzhen Media Group is one of China's largest content producers. By partnering with Huawei and Sobey, SZMG was able to modernize media operations with the Converged News Center, a production studio that is a model for next-generation workflows.
LRTV Custom TV
Quad Channel Modulator Driver with 46 Gbaud Capability from MACOM

1|28|16   |     |   (0) comments


MACOM's MAOM-003427 is the industry's first surface-mount modulator driver with 46 Gbaud capability to support next generation 200G and 400G applications.
LRTV Custom TV
Video Infographic: Validating Cisco's NFV Infrastructure

1|26|16   |   02:24   |   (1) comment


We all know that the network of the future will be virtual, but when will virtual become a reality? This video infographic covers the four key areas in which Light Reading, in partnership with EANTC, tested Cisco's NFV infrastructure: performance, reliability, multi-service capabilities and single pane of glass management.

For the full report, see

Between the CEOs
CEO Chat With Phil McKinney, CableLabs

1|22|16   |   13:36   |   (1) comment


At CES in Las Vegas, we met with Phil McKinney, CEO of CableLabs. Phil provides an update on the rollout of DOCSIS 3.1, his views on the future of open source and how consumer interest in virtual reality could affect network traffic.
Between the CEOs
Ericsson CTO on the Changing Telecom Market

1|21|16   |   10:26   |   (0) comments


At CES 2015, CTO of Ericsson, Ulf Ewaldsson, sits down with CEO of Light Reading, Steve Saunders, to discuss the changing telecom market, the new partnership with Cisco and the future of the telecom industry.
LRTV Interviews
Ireland's Data Dream

1|21|16   |   14:31   |   (0) comments


Host In Ireland president Gary Connolly tells Light Reading's Steve Saunders about the role Ireland is playing in hosting data for the world's largest organizations.
LRTV Custom TV
Brocade Keynote: Transitioning to the New IP

1|20|16   |   27:23   |   (0) comments


At 2020 Vision in Dublin, Andrew Coward, VP of Service Provider Strategy at Brocade, presents the transition to the New IP.
Upcoming Live Events
March 10, 2016, The Cable Center, Denver, CO
April 5, 2016, The Ritz Carlton, Charlotte, NC
May 23, 2016, Austin, TX
May 24-25, 2016, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Cisco's latest VNI numbers suggest the world will be using 366.8 exabytes of data on smartphones and Internet of Things devices, up from 44.2 exabytes, in 2015.
Hot Topics
Alphabet Is Serious About Google Fiber
Mari Silbey, Senior Editor, Cable/Video, 2/1/2016
Did Juniper Pay 'Peanuts' for BTI?
Mitch Wagner, West Coast Bureau Chief, Light Reading, 2/2/2016
Google's 5G Radio Ambitions Are Expanding
Dan Jones, Mobile Editor, 2/5/2016
How Data Center Outsourcing Fuels AT&T NetBond Growth
Carol Wilson, Editor-at-large, 2/3/2016
3.5GHz Startup Gets $22M for Small Cells
Dan Jones, Mobile Editor, 2/2/2016
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
As anyone who knows me will tell you, I like to think I know a fair bit about this next-gen-comms malarkey, but there's nothing like an interview with one of the ...
Animals with Phones
Happy Groundhogs for Technology Day! Click Here
Live Digital Audio

Broadband speeds are ramping up across Europe as the continent, at its own pace, follows North America towards a gigabit society. But there are many steps to take on the road to gigabit broadband availability and a number of technology options that can meet the various requirements of Europe’s high-speed fixed broadband network operators. During this radio show we will look at some of the catalysts for broadband network investments and examine the menu of technology options on offer, including vectoring and G.fast for copper plant evolution and the various deployment possibilities for FTTH/B.