Xtend Sees $20 Billion Market for Cellular Backhaul

Xtend Networks thinks there's gold in cellular backhaul services. In a new white paper released last week, Xtend calculates that the sale of T1 circuits to mobile carriers for carriage of wireless phone calls between cell towers and switching offices represents a $20 billion opportunity for the cable industry over the next five years. The white paper estimates that call transport eats up about 24% of cellular carrier revenue. Backhaul, the report says, now accounts for 60% to 75% of that expense. The paper projects that backhaul costs will soar much further with the rise of 3G, which requires closer cell site spacing and greater support for data and multimedia applications. With mobile carriers facing increased costs and margin pressures, it argues, cable operators will be able to take advantage of the situation by offering cheaper solutions. In other words, cable is uniquely positioned to create a win-win that lowers backhaul costs for the wireless industry and generates revenues for cable operators from a totally new market. Plus, deploying T1 infrastructure could enable cable operators to make further inroads in the commercial services business.