ABI: Mobile Backhaul Upgrades Essential for Network Performance Requirements
January 15, 2008 // Published as a news service by IHS
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According to ABI Research, backhaul is critical for mobile operators to deliver the expected bandwidth of third generation (3G) and newer technologies.
"Backhaul is a major contributor to network performance and cost, and operators should design their networks to meet peak traffic demand, not just average usage levels," said ABI Research senior analyst Nadine Manjaro.
Service provider testing shows that end-user data rates and the number of active subscribers served per sector vary greatly, based on the backhaul technology employed.
For example, analysts said as T1 reaches near capacity, the network performance degrades by more than 40%. But some operators believe traffic usage is "bursty," so a single T1 is sufficient to support a 3G cell site backhaul.
ABI Research analysts estimate global capital expenditures (CAPEX) for backhaul to increase from $14 billion in 2007 to $23 billion in 2012. Operational expenditures (OPEX) are also expected to rise from $1 billion to $6 billion during the same period.
"As a result, operators should be focused on solutions that will meet their performance requirements with the minimum CAPEX and OPEX," Manjaro said.
In 2007, T1/E1 and microwave backhaul became the two largest contributors to CAPEX and OPEX. Analysts said that operators should focus more on Ethernet-based solutions, including Ethernet over fiber and Ethernet over copper solutions, to optimize costs.
"In 2012, there will be a more distributed mix of backhaul technologies across the various options," said Manjaro. "However, microwave is expected to be the primary backhaul solution in all the regions studied, except Latin America and North America. Ethernet over fiber will be a very popular choice for upgrades between now and 2012, primarily due to its lower cost per megabit [Mb] and high data rate, compared with other backhaul options."
As operators upgrade their networks to meet growing bandwidth demand, they are upgrading to Ethernet-based solutions in both wired and wireless backhaul. Analysts said the location of cell sites in existing service-provider infrastructure, bandwidth requirements, alternate carriers, interface requirements and other factors all play a role.
Source: ABI Research.