Network Economics Drive Wireless Backhaul Investment Case

The anticipated explosion in mobile data traffic is forcing operators to rethink and rebuild their backhaul transmission networks, finds new research report

PRNewswire
NEW YORK
Jul 24, 2006

NEW YORK, July 24 /PRNewswire/ -- The profitability of emerging 3G data services over newly-built mobile broadband networks is under threat from the cost structure inherent in legacy, voice-oriented backhaul architectures, forcing operators to accelerate investment in next-generation access and metro transmission systems, finds the latest report from the subscription research service Unstrung Insider (http://www.unstrung.com/insider).

The report, Wireless Backhaul & 3G Network Economics, examines factors driving change in mobile backhaul requirements and analyzes the evolution paths of the key technologies that will deliver greater capacity to the cell site, at far lower cost per bit, than is possible today.

The rollout of services over high-speed 3G High Speed Packet Access (HSPA) and CDMA2000 1x Evolution-Data Only (EV-DO) infrastructure represents a vast change in performance for the cellular industry, and could generate a requirement for tens, or even hundreds, of Mbit/s of backhaul capacity at the cell site.

Traditional leased-line architectures, however, are unable to scale elegantly and cost-effectively to meet this demand. As a result, operators must investigate alternative access transmission mechanisms, from self-built microwave to digital subscriber line (DSL) and Metro Ethernet.

To optimize cost/performance ratios, the long-term vision is to move all cellular transmissions to IP/Ethernet networks. But the sector must also look to migrate more than a decade's worth of installed time-division multiplexing (TDM) and Asynchronous Transfer Mode (ATM) infrastructure, putting the focus squarely on multiservice platforms as operators evaluate their "buy versus lease" transmission choices.

Among the highlights of the report:

  * An 80:20 rule can be applied to cell-site capacity needs, with the
    equivalent of 4xE1 or 8xE1 likely to suffice for 80 percent of sites,
    while 20 percent will require the equivalent of 32xE1 (64 Mbit/s) or
    greater.

  * Microwave has emerged as the most cost-effective option for self-built
    access transmission networks, with vendors claiming positive return on
    investment in less than two years. With vendors reporting blow-out sales
    and order pipelines in 2005, this market will continue to expand through
    2008.

  * Equipment for cell-site or remote-aggregation nodes is emerging to
    optimize, groom, and combine TDM, ATM, and IP traffic onto Ethernet
    interfaces on the network side. Names in this space include Carrier
    Access, Celtro, Cisco, Eastern Research, NMS, RAD, and others.

  * Satellite, DSL, WiMax, and mesh are all still niche technologies; next-
    gen DSL has the most potential for cellular backhaul, and is likely to
    be used initially for data-only traffic in hybrid backhaul
    architectures.

  * There is uncertainty about how mobile operators should build out metro
    and aggregation networks, with three key approaches emerging: ATM-
    oriented multiservice switching (most popular today); multiservice
    provisioning platforms (starting to be popular for TDM grooming and
    pass-through); and Ethernet-oriented multiservice switch/router
    architectures (an emerging opportunity).

Companies featured in this report: Alcatel; Axerra Networks Inc.; Carrier Access Corp.; Celtro Ltd.; Ciena Corp.; Cisco Systems Inc.; Eastern Research Inc.; Ericsson AB; Fujitsu Ltd.; Juniper Networks Inc.; Lucent Technologies Inc.; Mangrove Systems Inc.; Motorola Inc.; NMS Communications Corp.; Nokia Corp.; Nortel Networks Ltd.; RAD Data Communications Ltd.; Siemens AG; and Tellabs Inc.

The report, Wireless Backhaul & 3G Network Economics, is available as part of an annual subscription (12 monthly issues) to Unstrung Insider, priced at $1,350. Individual reports are available for $900.

To subscribe, please visit: http://www.unstrung.com/insider. For more information about all of Light Reading's Insider research services, visit: http://www.lightreading.com/research.

To request a free executive summary of the report, or for details on multi-user licensing options, please contact:

Jeff Claudino
  Director of Sales
  Insider Research Services
  619-229-9940
  claudino@lightreading.com

  Press/analyst contact:

  Dennis Mendyk
  Managing Director
  Heavy Reading
  201-587-2154
  mendyk@heavyreading.com

  About Light Reading

Reaching a core audience of more than 917,000 enterprise IT managers and executives, Light Reading Inc. publishes http://www.lightreading.com/, the leading global content site for the telecom industry; http://www.byteandswitch.com/, a storage networking site; http://www.unstrung.com/, dedicated to wireless networking; http://www.darkreading.com/, an IT security site; and http://www.cabledigitalnews.com/, covering the cable industry's evolving communications infrastructure. Light Reading is also affiliated with http://www.heavyreading.com/, a market research site offering quantitative analysis of telecom technology to carriers, service providers, and vendors. Light Reading was acquired by United Business Media in August 2005, and operates as a unit of CMP Technology.

About CMP Technology

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SOURCE: Unstrung Insider

CONTACT: Jeff Claudino, Director of Sales of Insider Research Services,
+1-619-229-9940, claudino@lightreading.com; or Press\analyst, Dennis Mendyk,
Managing Director of Heavy Reading, +1-201-587-2154, mendyk@heavyreading.com

Web site: http://www.unstrung.com/insider
http://www.lightreading.com/