Mobile Broadband Network Ltd. (MBNL), the networks joint venture between U.K. operators EE and Three UK , has signed an eight-year backhaul capacity deal with Virgin Media Business Ltd. worth more than £100 million (US$161.4 million), the two parties revealed today. (See MBNL Backhauls With Virgin Media.)

Virgin Media Business is building 14 regional aggregation networks across the U.K. using Synchronous Ethernet (SyncE)-enabled packet transport equipment to handle the data traffic generated by 35.2 million mobile users (of which 27.5 million are Everything Everywhere customers). Virgin Media Business says the new networks will offer MBNL backhaul aggregation links of 1 Gbit/s.

Virgin Media Business is clearly keen to stress the perceived benefits of deploying "ground breaking" SyncE infrastructure, noting that this will be the U.K.'s first such backhaul network. (See At Last: Ethernet Backhaul Booms for Carriers, Ethernet Europe: Busting the Backhaul Bottleneck and Packet Backhaul Busts the 'Pain Barrier'.)

According to one backhaul sector expert, SyncE is certainly an appropriate choice for next-generation backhaul networks, though Virgin Media Business may need to think about additional enhancements in the coming years if it is to keep up with its main mobile backhaul wholesale capacity rival, BT Group plc (NYSE: BT; London: BTA). (See Ethernet Europe: BT Preps Backhaul for LTE and BT Unveils Ethernet Expansion Plans.)

"Synchronous Ethernet is one of the key standards for packet backhaul synchronization," notes Patrick Donegan, senior analyst at Heavy Reading . "Over time, Virgin Media will probably need to add IEEE 1588v2 for time/phase synchronization to remain competitive with BT as Long Term Evolution (LTE) is rolled out. But for the short and medium term, Synchronous Ethernet does what's required and does so according to the physical layer synchronization model that operators are most familiar with in mobile backhaul environments," adds Donegan.

The deal is good news for Swedish transport infrastructure vendor Transmode Systems AB , which has landed an eight-year deal worth an estimated 150 million Swedish kronor ($23.3 million) during the next 15 months. (See Transmode Wins Virgin Media Deal .)

Transmode, which announced its entry into the mobile backhaul infrastructure market in September 2009, is supplying its Ethernet Mobile Backhaul product that's built on its Native Packet Optical architecture. (See Transmode Goes Native for Packet Optical and Transmode Joins Mobile Backhaul Fray .)

The deal includes the provision of the vendor's Ethernet Muxponder family (EMXP) and Ethernet Demarcation Units as well as a new ROADM-based network.

"Working with Transmode we're looking to transform backhaul networks by delivering a unique service that deploys fibre-based Ethernet services to cell sites," noted Virgin Media Business managing director Mark Heraghty in a prepared statement. "We're best placed to deliver the speed and capacity that mobile companies need. With a fibre-based core network, we’ve got big ambitions for this market and see it as integral to the growth of our overall market share. Our partnership with Transmode makes our proposition all the more compelling."

Transmode's share price remained unchanged at SEK 43.50 in morning trading on the Stockholm exchange. The company joined the public markets earlier this year. (See Transmode Sticks to Growth Path.)

— Ray Le Maistre, International Managing Editor, Light Reading