This paper presents a brief overview of the mobile backhaul market, illustrates the unique challenges facing backhaul transport providers and mobile operators and describes various strategies for commercially viable transport of multi-generation mobile technologies over legacy and next-generation infrastructure.
Mobile Backhaul Trends
The mobile communications industry continues to grow at a significant pace. Industry sources report the following figures:
• 2.5 billion mobile phone users in 2006, growing to 3.6 billion by 2010
• 2.3 million base stations/backhaul connections worldwide in 2006, growing to 3.3 million by 2009
• Two of every three towers already have more than one mobile operator on them
• Projected backhaul requirements per cell site: 2-16 T1s/E1s in 2006; 2-8 T1s/E1s and 10-30 Mbps Ethernet in 2008
• New data and video services drive demand for more bandwidth. In the U.S. alone, mobile operators' transport costs are expected to skyrocket from $2 billion in 2006 to $16 billion in 2009.
• More technologies need to be supported: 2G/GSM, 2G/CDMA, 3G/UMTS, 3G/EVDO, HSDPA, WiMAX…
A closer look at these statistics reveals several warning signals. From 2006 to 2010, the number of mobile phone users is expected to grow by only 30%, while backhaul expenses will skyrocket due to an exponential increase in bandwidth required for video and multimedia applications as well as the need to support multiple technologies. Moreover, the Average Revenue Per User (ARPU) is likely to remain fairly flat, even for new data services, with competition from fixed line offerings keeping a lid on pricing. If mobile operators are to reach profitability targets, they must improve the efficiency of their networks by dropping the cost per Mbps of bandwidth. Because backhaul is one of the major contributors to the high costs of building out and running a mobile network - estimated to be about 25-30% of total operating expenses - it is critical that mobile carriers optimize their networks and/or find lower cost and more scalable cell-site backhaul solutions from alternative carriers. To ensure customer satisfaction, these optimized, scalable backhaul solutions must be in place as new wireless applications and multimedia services, such as music downloads, mobile video and gaming, are rolled out.
In this paper we will examine the business and technical challenges that the transport providers face to deliver inexpensive, scalable and reliable bandwidth with the correct interfaces to support a wide range of mobile technologies, as well as the challenges that mobile operators face to ensure that these 3rd party transport networks support their SLAs. We will also look at how the mobile operator can reduce costs by improving network efficiencies and optimizing available access networks.
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