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What to do until the fibre arrives – profitable backhaul strategies for today’s market
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What to do until the fibre arrives – profitable backhaul strategies for today’s market

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This presentation was used in the 'What to do until the fibre arrives' webinar. ...

This presentation was used in the 'What to do until the fibre arrives' webinar.

The presentation examines how mobile operators can lower backhaul costs by using wireless backhaul now, and investing in fibre later.

This strategy uses wireless as an interim solution for operators planning to move to fibre that need to increase backhaul capacity, but cannot move to fibre today.

The presentation shows over ten years, operators can save 27% when deploying wireless first, and building a fibre network later - or save 31% when deploying wireless initially and leasing fibre later.

The full white paper with more detailed analysis can be downloaded from: http://cbnl.com/resources/wireless-backhaul-can-ease-transition-fibre

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What to do until the fibre arrives – profitable backhaul strategies for today’s market What to do until the fibre arrives – profitable backhaul strategies for today’s market Presentation Transcript

  • www.cbnl.com SN A EZ C N UT G OS L INNext generation thinkingWhat to do until the fibre arrives- profitable backhaul strategiesfor today’s market16 May 2012
  • What to do until the fibre arrives - today’s agenda Monica Paolini, PhD Founder and President, Senza Fili •Can wireless backhaul ease the transition to fibre? Lance Hiley VP Marketing, Cambridge Broadband Networks Limited •Why point-to-multipoint (PMP) is so good for this approach •Operator backhaul deployment exampleswww.cbnl.com
  • Wireless and fibre backhaul in mobile networks: SN A EZ is two better than one? C N UT G OS L IN What we know • Fibre is often more expensive than wireless backhaul, but mobile operators plan to move to fibre in the long term • Mobile operators face a demand for increased backhaul capacity that has to be met in the short term The question • What should they do now to increase backhaul capacity? • Could mobile operators planning to move to fibre backhaul meet their backhaul requirements in the short term and save money, by deploying wireless backhaul first and move to fibre later? What we did • We examines the financial implications of a hybrid approach: wireless today, fibre later • We asked: is it cost effective? And under which circumstances? |3| © Senza Fili Consulting LLC 2012
  • Background assumptions SN A EZ C N UT G OS L IN We modelled mobile operators that • Operate in emerging and in developed markets, with different fibre costs and availability • Plan to build their own fibre network or to lease fibre links • Require higher-capacity backhaul, or plan to expand their network to new macro cell sites or to small cellsCost assumptions Developed market Emerging marketCapex per cell site per annumWireless installation, spectrum, and equipment $13,500 $13,500Leased fibre installation* $6,300 $7,700Cost to deploy fibre per km $85,000 $85,000Fibre link distance 1.5 km 5 kmOpex per cell site per annumWireless $8,050 $8,050Leased fibre $12,000 $22,000Built fibre $3,500 $3,500* Benchmarked against data from the US, UK, and South AfricaFor additional details on cost assumptions, see “Crucial economics for mobile data backhaul”, Senza Fili Consulting. |4| © Senza Fili Consulting LLC 2012
  • Four steps in our analysis SN A EZ C N UT G OS L INStep 0 Look at different solutions, separatelyStep 1 Gradual transition to fibreStep 2 Timing of transition to fibreStep 3 Sensitivity analysis |5| © Senza Fili Consulting LLC 2012
  • 0 Three solutions considered: SN A EZ Wireless, leased fibre, built fibre C N UT G OS L INPMP Wireless More expensive to install than leased fibre, lower recurring costsLeased fibre Highest opex solutionBuilt fibre High capex, longer deployment time, lowest opex |6| © Senza Fili Consulting LLC 2012
  • Wireless backhaul options (licensed spectrum) Conventional PtP • For: High capacity • Against: Coverage awkward, spectrum opex, high installation costs E-band • For: High capacity • Against: High capex and opex LoS multipoint microwave • For: Good coverage, low cost of ownership, High capacity • Against: Requires area-licensed spectrum Non-line of sight multipoint microwave • For: Good coverage, low cost of ownership • Against: Low capacity, spectrum can be expensivewww.cbnl.com 7
  • Architecture 1: Point-to-Point Microwave Radio, Star Topology• The most common microwave topology in use today − For N links, 2N radios − Dedicated RF channel for each node B served − Well-suited to constant bit rate traffic − Well-suited to long linkswww.cbnl.com 8
  • Architecture 2: Point-to-Multipoint Microwave Radio• The fastest growing microwave topology today − For N links, N+1 radios − Shared RF channel amongst all node Bs served − Well-suited to variable bit rate (bursty) traffic − Well-suited to dense environmentswww.cbnl.com 9
  • Wireless backhaul topologies PtP topologies MultipointTree (point-to-point) Ring Mesh MultipointKey Links small cell low capacity pop high capacity with redundancy www.cbnl.com 10
  • PMP Advantage Increases with Density: CAPEX and OPEX Point-to-Point Point-to-Multipoint 2 ODUs per link 3 hub ODUs plus 1 RT per link 2 truck rolls per link added 1 truck roll per link added 2 antenna rentals per link 3 hub site rental plus 1 per link 2 units power per link 3 unit power per hub plus 1 per link • 160 ODUs/truck rolls/antennas • 93 ODUs/truck rolls/antennas • 160 units of power consumption • 93 units of power consumption At 80 Links = PMP Saving of 67 ‘units’www.cbnl.com 11
  • Opex analysis: using UK published leased fibre prices• Leased fiber pricing used in the Cumulative capex and opex, Year 5 base case is higher than many $120,000 developed countries $100,000 Model strives to use median values, Per RAN site including developed and emerging $80,000 countries, which pushes prices up $60,000 $40,000• Using UK published retail $20,000 pricing: Fiber 40% more expensive than PMP, 27% less expensive $- than PTP PMP PTP E-band Fiber, leased Capex Opex• In competitive markets, PTP is 140 280 500 more expensive than leased fibre 34 mbps mbps mbps mbps Installation $ 2,000 $2,000 $2,000 $2,000•PMP remains only alternative to Yearly rental fees $10,000 $14,000 $20,000 $30,000 fibrewww.cbnl.com 12
  • 1 SN A EZ A gradual transition to fibre C N UT G OS L INWe looked at five backhaul options:• Wireless for the entire period• Leased fibre for the entire period• Built fibre for the entire period• Initial wireless, with a 10% leased-fibre substitution per year• Initial wireless, with a 10% built-fibre substitution per year | 13 | © Senza Fili Consulting LLC 2012
  • 1 Deploying wireless as an interim backhaul SN A EZ solution saves money C N UT G OS L IN Developed market | 14 | © Senza Fili Consulting LLC 2012
  • 1 Deploying wireless as an interim backhaul SN A EZ solution saves money C N UT G OS L IN Emerging market | 15 | © Senza Fili Consulting LLC 2012
  • New fibre deployment: Urban Ring•Early stage fibre deployment limited to urban rings•PMP extends reach of fibre rings quickly, with similar performance•Delivers ubiquitous coverage quicklywww.cbnl.com 16
  • 2 When should the operator SN A EZ move from wireless to fibre? C N UT G OS L IN Wireless as an interim solution towards fibre results in savings at a cell site if usedfor at least 5 years in the leased-fibre scenario, and 4 years in the built-fibre scenario | 17 | © Senza Fili Consulting LLC 2012
  • Extending reach of existing macro cells (densification)•Late-stage fibre deployment to macro cells•Upgrade or densification of existing network•Informed capex decisions for future fibre upgradeswww.cbnl.com 18
  • 3 If fibre costs go down, does it still make sense SN A EZ to use a wireless interim solution? C N UT G OS L INWireless as an interim solution towards fibre results in savings when leased fibre costs are $13,000+ per year, and the cost for building fibre are $30,000+ per km | 19 | © Senza Fili Consulting LLC 2012
  • Metrocell street fibre cabinet extension Leverage availability of fibre at street cabinets Co-locate PMP hubs to beam high-capacity multipoint bandwidth down urban canyons Extends fibre connectivity to street furniture-mounted metrocells quickly without disruptionwww.cbnl.com 20
  • Implications: wireless backhaul can save money to SN A EZ operators with a long-term fibre strategy C N UT G OS L IN Operators may deploy wireless backhaul as an interim solution ahead of fibre if: • Operators plan to lease fibre, but leased fibre is not available or is expensive • Operator plan to build a fibre network, but lacks the resources to do so within the required time frame, or prefers to extend the deployment over a longer period By deploying wireless backhaul initially and gradually transitioning to fibre, operators can reduce the NPV of their backhaul upgrade by: • 7% in a developed market and 31% in an emerging market compared with leased fibre • 14% in a developed market and 27% in an emerging market compared with built fibre | 21 | © Senza Fili Consulting LLC 2012
  • Implications: wireless backhaul can save money to SN A EZ operators with a long-term fibre strategy C N UT G OS L IN Solution When to adopt it? Lowest-cost solution, to be preferred if fibre is not required, not available, or Wireless not cost effective. High-opex solution. Its cost can approach built fibre over the long term, but it is typically less expensive than built fibre. Where it is available and inexpensive Leased fibre (up to $10,000 lease cost per site per year), leased fibre is financially the best solution. In a gradual transition to fibre, or at cell sites where a wireless solution can be Wireless used for 5 years or longer, this is the most cost-effective solution for operators to leased fibre committed to fibre backhaul in the long term. The high initial investment makes built fibre the most expensive option, unless Built fibre the deployment prices are very low ($30,000 or less per km). This is the best solution for operators committed to building their own fibre Wireless network and able to (or forced to) postpone the fibre network deployment. to built fibre The operator can save money by deploying wireless initially and fibre in four years or later, rather than deploying fibre initially. | 22 | © Senza Fili Consulting LLC 2012
  • Who we are • Formed in 2000 • Global marketshare leader in line of sight point-to- multipoint microwave technology • Our VectaStar multipoint product is selling to 7 of the top 10 mobile operator groupswww.cbnl.com 23
  • www.cbnl.comYour questionsDownload the free white papers• ‘Crucial economics for mobile data backhaul’• ‘Wireless backhaul can ease transition to fibre’www.cbnl.com/resources/white-papersMonica Paolini monica.paolini@senzafiliconsulting.comChris Wright cwright@cbnl.comCopyright © Cambridge Broadband Networks Limited. All rights reserved.