LR Live: Wireless Fiber Demand Fuels New Options

NEW YORK -- Backhaul & 4G Core Strategies for Mobile Operators -- The U.S. wireless industry still faces a major challenge in getting fiber to its cell towers and that hurdle is only getting higher as more towers are built to support Long Term Evolution (LTE) rollouts, says Hunter Newby, CEO of Allied Fiber LLC .

Today, only about 30 percent of the 300,000 towers built in the U.S. have fiber, even as wireless service providers plan to build out four to six times as many towers in order to make the best use of their limited spectrum.

"We need to understand the reality of what it is going to cost to build that and where we are going to build it," Newby says.

The Allied Fiber CEO says previous U.S. government efforts to support fiber deployment in rural areas correctly highlighted the broadband problem in those areas but didn't solve it. And he's not convinced that one recent effort, the U.S. Ignite public-private partnership, will get the job done either. A lesser publicized federal initiative, FirstNet, will use public safety as a way of getting around local restrictions on cell sites and fiber and could hold promise, Newby says. (See US Aims for 1-Gig Broadband.)

That demand for fiber is actually driving the business case of multiple alternative access vendors and has prompted one –- Zayo Group Inc. (NYSE: ZAYO) -– to continually expand by acquisition the fiber footprint it owns in Tier 2 and Tier 3 markets.

In many of the more developed markets, wireless operators have contracts in place but will soon be looking for more bandwidth, setting up new competitive opportunities for alternative access vendors (AAVs), says Zayo President David Howson, in a panel here on new backhaul opportunities for AAVs. Many Tier 4 and smaller markets don't have fiber and are ripe for hybrid solutions that combine fiber and microwave, he says.

Howson and Craig Simpson, VP of backhaul sales and development for Conterra Ultra Broadband Holdings Inc. , another AAV, say their companies aren't interested in speculative bids. Simpson says his company won't overbuild another fiber operator but will partner to provide a ubiquitous footprint for a wireless operator.

Both said that today's Ethernet technology enables them to deliver business services over the same fiber infrastructure without compromising what they deliver in terms of mobile backhaul bandwidth.

Because wireless operators have lost out to companies such as Apple Inc. (Nasdaq: AAPL) on the application and device side, they are increasingly differentiating based on network performance, which is pushing the stakes higher for their backhaul vendors to provide higher levels of service assurance, says Patrick Ostiguy, president and CEO of Accedian .

"Performance assurance will be even more important in years to come," Ostiguy says. "Wireless operators also have to address how they plan capacity upgrades."

Capacity demands are also putting pressure on backhaul capacity to be more flexible, and that in turn is driving the push to software-defined networks, says Eric Clelland, VP of North American sales for Cyan Inc. . The flexibility to share available bandwidth depending on time of day and traffic demands will only increase. (See Adding Up the SDN Effect.)

"As bandwidth demands grow, all of a sudden there is going to be price pressure and the competitive ability to be more flexible and to move to a more software-controlled network will be important," agrees Howson. "We are not quite there yet -– it is not being requested or demanded by wireless groups. But we will get on the front foot and offer those to our clients sooner rather than later."

— Carol Wilson, Chief Editor, Events, Light Reading

JohnMike 12/5/2012 | 5:28:54 PM
re: LR Live: Wireless Fiber Demand Fuels New Options

Carol: Couple points ...

1) We need to make a distinction between cell sites and cell towers. There are close to 300,000 cell sites in operation in the U.S. but only about 100,000 cell tower sites. The industry average is 2.5 - 2.7 cell sites per tower.

2) When we analyze large-scale cellular networks, we find that only about 55-60% of the towers are close enough to a CO or RT to be served by wired facilities. The rest of the towers are in locations that are beyond reach to be served economically with copper or fiber cable; so microwave backhaul becomes feasible and attractive.

Every market is different but potential backhaul providers will find the business case for FTTCS hard to justify in many instances.

paolo.franzoi 12/5/2012 | 5:28:53 PM
re: LR Live: Wireless Fiber Demand Fuels New Options


If you consider FiOS economical then you would have to say your percentages are very far off.



JohnMike 12/5/2012 | 5:28:52 PM
re: LR Live: Wireless Fiber Demand Fuels New Options


I really do believe that fiber backhaul is the ultimate solution, both in opex and throughput.

However, I'm saying that there is a higher proportion of towers that are out of reach of fiber (in whatever form) that many analysts don't acknowledge, or don't know.

Sure, the LEC will look to provide a wired solution for backhaul if they can. Wireless backhaul fits the bill where wired solutions may be difficult to prove in, especially for distant sites that do not require the same amount of throughput capacity as metro/suburban sites. 

That said, pt-pt microwave still represents the minor alternative in the whole cellular backhaul scheme. I think we can agree on that.


paolo.franzoi 12/5/2012 | 5:28:52 PM
re: LR Live: Wireless Fiber Demand Fuels New Options


You missed my point.

Since FiOS is economical - therefore all urban and suburban fiber networks are economical...thus about 90%+ of all cell towers are economically reached by fiber.  FiOS is, of course, not an exact equivalent.  Reaching the cell towers is a lot cheaper than doing a broad FTTH network.

Does that mean there is no place for wireless backhaul?  No - it is just that people overestimate their available market all the time.  Somewhere between your percentage and my percentage seems a lot more likely.  Both builds are builds and have tradeoffs.  Since the local wireline carrier is likely to do the construction, the chances of them wanting to do a wireless build seems much more remote than you can present.



JohnMike 12/5/2012 | 5:28:52 PM
re: LR Live: Wireless Fiber Demand Fuels New Options

I think my numbers are pretty good and are based on actual analysis of several large scale networks. While it might be an economical solution where it is close to cell sites, FiOS mainly serves suburbs of large metro areas in Verizon's operating footprint. FiOS might touch a higher percentage of cell sites in its coverage area but it is by no means total. And don't forget that Verizon truncated its FiOS program.

paolo.franzoi 12/5/2012 | 5:28:51 PM
re: LR Live: Wireless Fiber Demand Fuels New Options


They don't for the wireless providers...but of course they are served today by copper access from the wireline providers...who would do the buildout.  So, yes those wireline providers DO have right of ways.

I think the difference is likely one of two things:

- In Europe, most companies do not outsource their backhaul to local wireline providers and so wireless backhaul is much more prevelant than it is in the US.  I do not think it is likely that the US wireless backhaul market is likely to change in this regard, except potentially in specific locations (thus my comment around yes there is a US market for wireless backhaul).

- More likely, JohnMike works for a Wireless Backhaul Radio provider - probably in marketing.  So, he wants to make the biggest possible available market for the technology - making an assumption that all wireline buildout will cease.  

The question really is to me - Who is doing the buildout?  Today, Wireless Companies outsource this primarily.  If this stays true (and there is no indication of a bulk change) then the chances of wireline carriers building out wireless backhaul seems remote.  What does seem possible is that Wireless companies may not wait in some hot locations for the wireline buildout.  That would be the case to get wireless backhaul in place.  Of course, it would be interesting as the company most interested in wireless backhaul may not actually own the tower.



Duh! 12/5/2012 | 5:28:51 PM
re: LR Live: Wireless Fiber Demand Fuels New Options


I think I understand the disconnect between you and JohnMike.  FiOS (as you know) was built out on existing rights-of-way, mostly lashed on existing strand.  That's what made it (relatively) economical.  His point is that lots of towers don't have existing rights-of-way and civil works on which fiber can easily be installed.  Perhaps they're on tops of buildings that don't have fiber access of any kind, on hilltops, on electrical transmission towers... you get the idea.  True, they do need power, but it isn't necessarily the case that the fiber problem is as easily solved as the power problem.

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