Case Studies

Cellular Backhaul: Do You Hear Opportunity Knocking?

The dramatic upsurge in mobile apps and consumer demand for multimedia are creating challenges for mobile operators and service providers by boosting network capacity while minimizing costs. By managing cellular backhaul, high bandwidth shortages create tremendous opportunities to increase bottom line profits. Cellular or mobile backhaul is the infrastructure and process of carrying voice and data communications from the access network (cell sites) to the core network or backbone and is a primary component of cellular networks. Simply put, backhaul is the link between the nearest tower and the phone connectivity service provider. When a mobile phone call is placed, the signal goes over radio waves to an antenna. Then, the backhaul system pulls the signal from the antenna, usually mounted on a cell tower or rooftop, into the carrier's wired network.

When usage is high, wireless carriers can add capacity to their backhaul pipes as the explosion in bandwidth usage requires more bandwidth per cell site. spatialNET® helps solve this problem with bandwidth and capacity management such as dark fiber tracing, multiplexing, and site and location management.

Demand Squeezes Resources

The increases in 3G and 4G networks and in backhaul capacity needed between mobile network components place backhaul networks in a struggle to support the growing requirements of high-bandwidth mobile video and data services. Carriers are pursuing aggressive strategies to upgrade their mobile networks to handle the extra traffic.

Revenues for the cellular backhaul market are projected to surpass $8 billion by 2015, according to the Dell'Oro Group. A report by the organization indicates an increase of more than 40 percent in the overall market in the next five years — more than double that for the routers/switches segment.

"The huge growth in bandwidth requirements, coupled with the transition to 4G IP-based cellular radio technologies will drive the mobile backhaul market over the next five years," said Loren Shalinsky, senior analyst at Dell'Oro Group. "The largest increase in mobile backhaul equipment revenues over the next five years will likely come from the Asia Pacific and EMEA (Europe, the Middle East and Africa) regions, as these areas grow their cellular subscriber base as well as prepare for next generation cellular network technologies like HSPA+ and LTE."

The Potential Is Enormous

In 2010, the business services divisions of Cox Communications and Time Warner Cable reported more than $1 billion each in commercial services revenue, with cell backhaul accounting for a significant part of the revenues, Mike Robuck wrote on CedMagazine.com (March 1, 2011). For Cox Business, wholesale transport accounted for $100 million of the $1 billion, with cell backhaul the highest growth area. Time Warner Cable's fourth-quarter cell backhaul revenue was $26 million in 2010.

Across the cable industry, sales from wireless carriers may reach $3.6 billion in 2012, researcher GeoResults Inc. predicts.

Cable operators need to offer backhaul services backed by service-level agreements (SLAs), and provide the office infrastructure and project management to take a network deployment from an RFP through implementation to post-installation support.

"It's big business to backhaul traffic, and in North America about 85 percent of the cell sites are copper-fed rather than fiber-fed," said Michael Howard, principal analyst and co-founder of Infonetics Research.

More people are using cellular telephones as a primary means of communication even when they have land lines. Cellular traffic also has expanded with phone-based Internet browsing, email, gaming, video and photography. Average usage rate and file size are expanding exponentially.

Knowing that network availability equals network revenue, cellular providers are faced with over-subscribed networks and equipment that is expensive to upgrade. If they don't add capacity, however, they'll also be faced with more dropped calls, delays in dialing, and turnover in subscribers. Do you know what your bandwidth can handle? If not, spatialNET does. Nothing can manage your bandwidth capacity more accurately than spatialNET.

Defining the Issues

Cellular backhaul is a major contributor to the high costs of building and running a mobile network, estimated at 25 to 30 percent of total operating expenses, eeTimes.com reported.

A number of transmission media carry mobile backhaul traffic including microwave, fiber, copper and satellite. Cost, availability and geography drive the choice of backhaul.

Data services have been growing with 3G and 4G mobile networks smartphones, OS-related applications and comprehensive data plans. Because of increased congestion in networks, the growth in mobile data usage has changed the underlying dynamics of mobile networks.

Many mobile operators have had to find new solutions besides adding costly parallel T1/E1's to adjust the required bandwidth, according to ABIresearch.com. Ethernet can handle larger amounts of data at a lower cost per bit, but synchronization and other issues emerge. Another question posed by the website: how to migrate legacy ATM, SDH and SONET protocols toward IP protocols that will fit each operator's needs.

A reality for operators is that leasing copper lines are only a temporary measure for lightly loaded cell sites. Although fiber offers plenty of capacity, its availability is limited while costs to install new fiber are very high. The choice for wireless backhaul technology involves considerations such as network capacity, expected or required data speed, relative cost, electromagnetic interference, and availability of radio frequency spectrum space. Cellular operators want to extend their networks to more subscribers and provide more bandwidth to each. Meanwhile, competition and decreasing ARPUs (average revenue per user) have created a need to reduce network costs while delivering in-demand, high-quality services.

Meeting the Challenges

As broadband Internet access subscriber rates rise, service providers wonder how they can add subscribers and keep access speeds and reliability up to their customers' expectations. Otherwise, they lose them. Adding capacity to keep high-speed data service accessible is costly, however, and installing additional fiber or copper lines from local points to the network operations center is costly and slow. Isn't the answer spatialNET, your capacity management software?

With backhaul expenses accounting for a significant portion of network costs, carriers must find a way to enhance backhaul capacity while reducing its cost per bit. When choosing a backhaul technology, they must consider capacity, cost, reach, and the need for such resources as frequency spectrum, optical fiber, wiring, or rights of way (Wikipedia). Also, backhaul capacity can be leased from another network operator.

"By offering concurrent support for T1 and Gigabit Ethernet backhaul services, cable operators can give cellular operators the flexibility to maintain current T1 services while deploying lower-cost and more scalable IP/Ethernet services in the future," according to Motorola's white paper titled, "Increasing Revenue by Delivering Cellular Backhaul Services". Cable operators can now offer more flexible scalability and allow cellular providers to supply bandwidth much faster than through provisioning additional T1 lines for incumbent local exchange carrier (ILEC). This means faster revenue for cellular providers. When cable operators leverage existing optical backbone and access infrastructure, their costs to deliver backhaul services are lower than ILEC costs. Cellular providers, relying on cable operators for cellular backhaul to drive down operational costs, increase revenue and are able to add new services.

About SPATIALinfo

SPATIALinfo is a network-management software company based out of Melbourne, Australia, and Denver, Colorado. More than 10 years ago, we began developing software products to plan and manage physical and logical networks for cable, broadband, telecommunications, and utility (electric, gas, water, and waste water) companies. Since then, we've been collaborating with our customers to ensure our products and services meet their business needs in a changing landscape.

Today, SPATIALinfo is a leader in solutions to help manage physical network assets. We deliver the tools communication providers need to create, maintain and access up-to-date and time-critical information about your communication networks. They're all in a single network asset registry: our spatialSUITE® product.

spatialSUITE provides enterprise wide access to timely and accurate network information. This solution is based on a flexible information model that tracks everything from physical location to equipment specifications, connectivity and capacity (e.g., dark fiber). The spatialSUITE leverages network knowledge across all areas of the business, from design and engineering to sales and marketing.