NEW YORK -- 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 (Unstrung 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 decades 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.
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