Light Reading

Tellabs IDs 4G Bottleneck

Ray Le Maistre
2/13/2013
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Mobile operators may be deploying state-of-the-art radio access network (RAN) technology to meet the current and future demands of smartphone-wielding 4G users but they're in danger of creating a new bottleneck in their backhaul networks that could affect quality of service levels and suppress revenue-generating potential. That's the key finding of a new Strategy Analytics Inc. report commissioned by Tellabs Inc., which suggests that, at current planned investment levels, operators in the Asia/Pacific region are on course to face the biggest backhaul capacity shortfall. The team at Strategy Analytics has been very precise in its calculation of just how much operators might be underestimating their backhaul capacity requirements. For example, in 2017 (based on set criteria used by the analyst group), the world's mobile operators are (in total) on course for a backhaul investment shortfall of more than $9.1 billion, leaving them more than 16 petabytes short of the network capacity required to deliver unencumbered data traffic throughput. So how did Strategy Analytics come up with these numbers (numbers, it should be noted, that will have major backhaul transport equipment vendor Tellabs salivating at the potential of some panic purchasing…)? Well, the analysts (who completed the report in late 2012) assumed that operators will continue to expend 17.5 percent of their total cost of operations on backhaul during the coming five years. They also used their own mobile data traffic forecasts to predict the volumes of data traffic running over the operators' networks. So, to be accurate, the Strategy Analytics forecast will need to be right and operators will have to maintain their current backhaul expenditure levels as a percentage of overall investment. (This is not a criticism of the report's methodology but an observation for perspective.) Based on those criteria, mobile data users in Asia/Pacific are most likely to find their service quality levels depleted by backhaul bottlenecks: Strategy Analytics estimates that, in 2017, the region's operators will have a collective backhaul investment shortfall of $5.3 billion (and a capacity shortfall of more than 9.4 petabytes), compared with a collective shortfall of about $656 million in North America (capacity crunch of 1.7 petabytes). The Strategy Analytics team has also generated a number of statistics related to how much operators could boost revenues and decrease churn if they invested the required cash in their backhaul networks. Tellabs, naturally, wants to help operators break that bottleneck. "Addressing the new capacity crunch requires a highly strategic approach to backhaul," said Tellabs CEO Dan Kelly in a prepared statement. "Operators who treat backhaul planning as a long-term, strategic investment opportunity to enhance customers’ Quality of Experience will produce higher revenue and profits," he added. Tellabs could do with some extra business: Its fourth-quarter results showed poor sales for the vendor's 8800 and 8600 routers, which are pitched at mobile backhaul networks. (See Tellabs Axes Product, Cuts Jobs.) — Ray Le Maistre, International Managing Editor, Light Reading

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Dan Jones
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Dan Jones,
User Rank: Light Beer
2/13/2013 | 8:05:25 PM
re: Tellabs IDs 4G Bottleneck
Backhaul will always, always be the bottleneck. Just the way it is.
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