Backhaul Costs Burdening Wireless Telcos

( 1 Jan 2008 )

The recent "Transport Networks for Mobile Operators" (TNMO) conference in Hong Kong highlighted the growing nuisance that wireless backhaul is becoming for the region¡¯s mobile operators. "PCCW, StarHub, MobileOne, Chunghwa Telecom, along with a number of suppliers, agreed on one thing: as bandwidth speeds on cellular networks increase, and packet-based mobile services attract more users, traffic growth is making traditional backhaul network designs unmanageable," said Matt Walker, Ovum Senior Analyst, based in Thailand.

Carrier Ethernet-based products and architectures, network/site sharing, fiber network expansion, WiMAX, and other techniques for backhaul cost optimization were explored at TNMO. Ethernet in particular has been the subject of much hype, in particular by vendors, and it is likely part of the most suitable long-term solution. However, big obstacles remain, such as unsettled standards, synchronization, the need to exploit the installed base, the need to train field personnel with new boxes and test equipment, interoperability, and others.

One of the vendor presenters at TNMO, Cambridge Broadband, pointed out the power of the installed base, saying that it is possible that the E1 requirement in mobile backhaul networks may never entirely disappear.

According to Ovum RHK's optical networks research findings, while SDH/SONET-based optical edge devices (OEDs), also known as MSPPs or MSTPs, are becoming more packet-centric with each passing quarter, legacy service interfaces (from low-speed SDH/SONET down to E1/T1) are growing steadily.

"A key driver for this growth is mobile network expansion across the globe," added Walker. "We expect, for instance, global shipments of E1/T1 interfaces on OEDs to grow at an average annual rate of 8 percent from 2005 to 2011, and STM-1/OC3 client interfaces on OEDs to grow at 29 percent annually. We expect this segment to continue to be a hot one for vendor product innovation and carrier investments, as mobile operators around the world try to improve the efficiency with which they manage the traffic emanating from new packet-based wireless services."