Mobile operators are slow to adopt packet-based transmission in their backhaul networks, despite a clear need to reduce costs as data traffic continues to grow, according to a new Heavy Reading report, "Packet Backhaul: Carrier Strategies & Real-World Deployments."

In the first large survey of live packet backhaul deployments, Heavy Reading finds that the transition from circuit-based time division multiplexing (TDM) technologies to packet-based transport is still in its infancy.

As of the end of April 2009, there were fewer than than 55,000 cell sites live with packet backhaul worldwide out of a global total of 2.4 million cell sites, according to the report.

Deploying packet backhaul is critical for mobile operators if they are to improve their profit margins, which are under threat from ever-increasing amounts of data traffic on their networks. With higher levels of data usage, traditional circuit-switched transport does not offer the flexibility and capacity or the right cost per bit to cope with the traffic on the network.

And if the rate of adoption of packet backhaul does not accelerate fast enough, the risk for mobile operators is that they could be forced to throttle back data usage allowances or even slow down subscriber acquisitions to protect their profit margins, warns the report.

So, what's holding operators back? In this case, the global recession is not to blame, although it has been a contributing factor. Instead, the main reasons for the low adaption are organizational issues at operators and their perceptions of the technology risks. Even though mobile operators have already made the circuit-to-packet transition in their core networks, that shift has yet to take place in the departments that run the backhaul networks. (See Carriers Don't Trust Ethernet Backhaul?)

Europe leads the way
Europe has the most live packet backhaul deployments, according to the report. Operators BT Group plc (NYSE: BT; London: BTA) and Vodafone Portugal emerge as technology leaders in terms of using packet backhaul for voice as well as data services. Europe's lead here reflects the widespread deployment of 7.2-Mbit/s and even 14.4-Mbit/s HSPA networks. (See Ethernet Benefits From 21CN Rethink, BT Uses Tellabs for Ethernet Backhaul, BT Still Coy on Ethernet, and Vodafone's Backhaul Overhaul.)

Of all the deployments studied, most operators have opted for a hybrid approach to packet backhaul, whereby high-speed data traffic is carried by the packet network and voice and low-speed data traffic is still carried by the T1/E1 or SDH/Sonet circuits.

Despite a slow start, the report concludes that there is still a big opportunity for equipment vendors because substantial growth in this market is inevitable.

— Michelle Donegan, European Editor, Unstrung