|Topic:||Mobile broadband traffic jam|
|Title:||rVP Market Strategy|
|Organisation:||Cambridge Boadband Networks|
Lance Hiley is Vice President of Market Strategy at Cambridge Broadband Networks where he is responsible for all outbound marketing, market and channel development and manages the corporate brand. Before joining Cambridge Broadband Networks, Mr Hiley worked for Anite Telecoms as Marketing Director and led its entry into the WiMAX protocol testing marketplace. Mr Hiley has worked for other wireless companies including Lucent Technologies Microelectronics, and Parthus plc. Lance Hiley holds a DEC Electrical Engineering degree from Dawson College in Montreal.
Operators hope that revenues from 3G and 4G data services will replace declining voice revenues. Backhaul, connecting mobile access networks to the core network, was never a major expense for mobile operators, but high data rate 3G and 4G networks multiply backhaul costs two to three times as much and reduce profitability. Wireless, microwave, backhaul promises to cut backhaul costs considerably. The adoptions of point-multipoint (PMP) wireless, which offers the greatest reductions, can reduce backhaul costs even more and help preserve operator profitability.
The mobile broadband explosion The headlines are clear: mobile broadband is exploding and operator strategies to promote 3G ‘dongles’ (a small plug-in computer modem for third generation connectivity) are paying off. So much so that, according to analysts at Morgan Stanley, 50 thousand people a month are signing up for mobile broadband packages. The latest figures point to some 100 million mobile broadband users on more than 300 networks worldwide, with mobile data traffic set to increase by 1,088 per cent between 2007 and 2012 according to analysts Informa Telecoms and Media. Telecom equipment maker Ericsson expects mobile broadband Internet subscribers to rise to 2.2 billion in five years’ time, fuelled by exponential growth in emerging markets. Tie-ups with computer manufacturers and retailers will add to this growth. It is early, but in the UK alone, mobile operator ‘3’ has followed in the footsteps of mobile phone retailer Carphone Warehouse, and launched a laptop and dongle bundle. Orange is likely to follow suit shortly, and Vodafone recently announced a deal with laptop manufacturer Lenovo, where new owners will be able to connect to the Vodafone mobile broadband network via a module embedded into the laptop, making it easier to go online and possible without a dongle. The issue, according to the same report by Informa, is that data traffic volume is growing at a faster rate than data revenue. Current predictions indicate that global mobile data revenues will increase by 77 per cent between 2007 and 2012, but global data growth will increase even more rapidly – by over one thousand per cent over the same period, with mobile video traffic growing more than thirty-fold by 2012. All of this translates into an enormous capacity build-out globally, and a massive opportunity for operators to capitalise on the demand for data services. However, if they are to capitalise on this trend and earn significant revenue from data, they will need to choose the right backhaul architecture to increase capacity and performance, and reduce the currently high capital and operating expenditures associated with handling data. Why is backhaul so crucial? Backhaul provides the connection between the core network and the mobile base stations that connects to the users’ devices. Any cellular network is only as good as its backhaul since it does not matter how well the cellular base stations perform or how wide a choice of handsets the customer has, if the backhaul capacity isn’t available the user suffers. In times past, backhaul wasn’t such an issue. A standard leased line (typically delivering around two mbps) would be sufficient for a number of voice calls and some data. As such, with 2G networks, transmission costs accounted for as little as ten to 20 per cent of operational expenditures. However, the situation with 3G networks – and their evolution to HSPA and LTE – is substantially different; operating expenses, driven by backhaul costs, rise to 30 to 40 per cent, with global expenditures predicted by Infonetics to reach US$23 billion by 2013. This, potentially, could create a huge drain on operator budgets globally and make it challenging for service providers to realise significant profits from data services. As such, cellular operators need to take a holistic view of their backhaul evolution needs. Not just in terms of networks designed to backhaul the cellular traffic itself, but also in terms of the potential to save costs by designing a common backhaul network that not only supports current standards like 2G and 3G, but is also equipped to handle so-called 4G standards like LTE and WiMAX. Wireless backhaul options Globally, an increasing percentage of new backhaul investment is in microwave. The business case rests on ease of deployment, and greater range, performance and flexibility. According to the Yankee Group, microwave now represents 50 per cent of all backhaul and, outside of North America, microwave penetration is greater than 60 per cent. Additionally, our own research estimates that nearly 80 per cent of all microwave links sold each year are used to backhaul voice and data traffic from wireless base stations back into the network. Infonetics reported that the total market for wireless backhaul is likely to be in excess of US$3 billion in 2008. There are two flavours of microwave backhaul: point-to-point, and point-to-multipoint. Traditionally mobile networks use the ‘fat pipe’ point-to-point (PTP) approach, where the links operate at a fixed frequency and capacity and operators have to design the network with capacity for peak loads. PTP is best suited to longer-range links, rural areas and short very high capacity links, but generally requires a spectrum license for each link, which can only carry one type of traffic over one type of frequency. This means operators must invest in spectrum for links which only operate at ten per cent of capacity most of the time. Additionally, some of these frequencies are affected by atmospheric conditions, which means operators need to employ adaptive modulation to step-down the capacity for short periods of time whenever an atmospheric event – like a rain storm – passes through the region where the microwave links are operating. Employing an approach which is not flexible requires expensive licences and causes bandwidth capacity to be throttled is clearly a poor use of valuable spectrum resources. Figure 1: Point-to-Point Microwave networks rely on individual links between the central aggregation point and each cell site: each requiring site and spectrum planning Point-to-multipoint (PMP) microwave uses a different and dynamic architecture to address the backhaul issue. Rather than fixed links, PMP brings a number of cell-site links back to a single aggregation point or hub. Immediately, this reduces the number of radios and antennae making the network less expensive to build, as well as making it less energy-hungry. In addition, because the spectrum licensed for the system covers a number of radios, the resource is in effect shared – making the utilisation of the spectrum more efficient and more flexible. PMP microwave systems also lend themselves to a more IP-like approach to packet data management. Figure 2: Point-to-Multipoint microwave networks share a common aggregation or ‘Access Point’ with many sites – Spectrum and site planning is dramatically simplified Working with a base raw data rate of over 150Mbps, PMP backhaul architectures then apply data optimisation and statistical multiplexing to provide an ‘efficiency gain factor’ of up to five times. This effectively increases the backhaul capacity of a PMP solution to 700 Mb/s or more per sector. This means that not only is PMP easier to deploy than other backhaul technologies, it also offers increased capacity at a much lower ‘cost per bit’. For a typical western European operator, this brings cost savings of up to 50 per cent compared to traditional microwave solutions. With PMP, the access point controller further aggregates traffic; since PMP access points tend to be organised into four sectors of 90 degrees, there is another level of aggregation when the traffic from the four sectors is combined. Although effective at moving large quantities of data between two points, PTP microwave is neither dynamic nor flexible. This makes it difficult to configure to take advantage of resource efficiencies and aggregation benefits without resorting to separate systems within the backhaul network such as protocol optimisers and traffic aggregators, thereby increasing the cost of an already expensive solution. A hybrid approach The majority of operators facing bottlenecks on their networks are working with legacy networks. As such, they need a solution that delivers the same result as a network planned and built from scratch to shift the traffic generated, but without the expense of doing it by traditional methods or the expense of rebuilding everything. The quickest and easiest way to implement PMP in an existing network is to build a hybrid network that uses PMP microwave backhaul to deal with the packet data from new mobile broadband services whilst leaving the legacy backhaul network in place to deal with voice traffic. As operators migrate their voice to VoIP or when the older networks meet their limit, it is easy to move the voice traffic over to the PMP network without interrupting other customer services. The challenge is ensuring a smooth migration to new backhaul networks that reduce costs and improve the customer’s experience. Operators need to invest in backhaul solutions that take into account the realities of their current network infrastructures as well as the needs of their future networks. With its inherently traffic-neutral, flexible, innovative architecture, PMP microwave will fit the bill in most cases. Achieving higher backhaul capacity is not just a matter of adding bandwidth, it also involves increasing the efficiency of traffic handling. Clearly no ‘one size fits all’ solution exists for every operator, but when measured against competing options, microwave, and in particular PMP microwave, shows compelling advantages based on the four main metrics which matter to operators – capacity, quality of service, capital expense and operating expense.