OECD: Wired Networks Glorified Backhaul for Mobile

The latest report from the OECD highlights the rapid growth of mobile offload from wireless networks but suggests this could lead to monopolies on fixed networks in the future as the demand for this kind of backhaul increases.

The Communications Outlook 2013 report from Organization for Economic Cooperation and Development (OECD) finds that telecom revenues have rebounded since 2011, thanks mainly to the rapid growth of mobile. The organization notes that data service revenues "are growing at double digit rates in most OECD countries," and the transmission of data -- not voice -- is "now the major source of growth for network operators."

A great deal of this traffic is not actually traveling over the cellular networks, however, but being shunted off to fixed networks via WiFi connections, the report summary notes. (See Google: Mobile Devices Influence Wireline Sales.)

"By far the greatest traffic generated by smartphones or tablets is linked to the use of Wi-Fi associated fixed networks, rather than cellular networks," says the OECD report. "Fixed networks have, in effect, become the backhaul for mobile and wireless devices with some studies claiming that 80% of data used on mobile devices is received via Wi-Fi connections to fixed networks."

The report warns that this could soon become an issue with constraints both on spectrum on the radio side of the wireless equation as well as the availability of fixed networks for mobile offload:

    Limited spectrum and the increasing demand for data services mean that mobile networks will strive to offload traffic to fixed networks. Policy makers and regulators need to ensure enough supply to maintain sufficient backhaul for wireless networks, especially if there is insufficient fixed access network competition. While there is debate as regards the schedule for fibre-to-the-residence, all agree that network operators will continue to bring this technology closer to residences and end users. The challenge for regulators is that, regardless of the technology used, many parts of the OECD look likely to face monopolies or duopolies for fixed networks. Wireless can provide competition, but spectrum availability will always impose limits that are not a constraint for fibre.

Why this matters
One conclusion from the report might be that wireless broadband is no substitute for wired networks. The trend to view wireless as the front-end connection of choice, no matter how the traffic actually terminates, is likely to continue. This suggests that eventually all network providers -- wired, cellular and WiFi -- will be looking to compression and caching techniques, and more, to get more out of the bandwidth available on each element of the network.

For more

— Dan Jones, Mobile Editor, Light Reading

@jopocop 8/22/2013 | 5:41:52 PM
OCED: Wired Networks Glorified Backhaul for Mobile We hear so much about carriers "off-loading" from the source, that is, the mobile device instantly connects and transmits via the WiFi that is present.  Yet, they don't talk about the opposite, lets say the "In-loading" side of the equation.  What I mean is that the mobile device needs to be reached as it is receiving a call or data input.  Lets say that mobile device is moving about, whether by vehicle or by the ambulating user.  So, the issue is how does the telco operator accomplishes successfully that transit to the moving moble device, that may or may not be at a WiFi hotspot.  We know it is a two way street. Sure, the operators can transit the off load into the wired fixed networks, but then they also need to get that communication into the other direction, to reach that mobile device that is mobile. That is where they have to build whatever it takes to get that part of the service done, regardless of the "off loading" they can benefit from.  They are in a catch twenty two situation.  They are being paid by the customers to make sure transit works both ways, hence, the great need for the wireless cellular spectrum radio side of the network.
Carol Wilson 8/22/2013 | 2:38:04 PM
Re: Don't we basically have fixed duopolies already I get that, and I think they are on target. Many of the folks who built fiber-optic backbones are now trying to get fiber to the tower as fast as possible to capture what they see as their largest future market. 

So there may be a duopoly in many places when it comes to last-mile fiber but I think there will be ample competition in other areas of the network. 
DanJones 8/22/2013 | 2:23:21 PM
Re: Don't we basically have fixed duopolies already This report is basically considering ALL wired networks as off-load backhaul for wireless though
Carol Wilson 8/22/2013 | 2:09:01 PM
Re: Don't we basically have fixed duopolies already Not when it comes to building backhaul networks -- every carrier out there, and we have quite a few, is salivating over that market. 
DanJones 8/22/2013 | 12:27:30 PM
Don't we basically have fixed duopolies already Don't we basically have fixed duopolies already in the US? Tri-opolies maybe... :-)
Sign In