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Mobile Backhaul Evolution
The document discusses the evolution of mobile backhaul, emphasizing the need for mobile network operators (MNOs) to transition to more efficient, cost-effective technologies like Ethernet and microwave solutions. It highlights the increasing operational costs associated with traditional backhaul methods and provides insights into future demands for bandwidth as smartphone usage grows. Key trends indicate a paradigm shift towards simpler and lower-cost backhaul solutions to meet the rising data demands while maintaining operational sustainability.
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Mobile Backhaul Evolution
- 1. Mobile Backhaul EvolutionJennifer M. Pigg April 27, 2010
- 2. Agenda Drivers: Overthe Edge Cell Site Bingo Ethernet Everywhere Media Money Conclusions
- 3.
- 4. Future Smartphone Purchase:Likelihood Q1 2009 Base: People who own a mobile phone
- 5. Future Smartphone Purchase:Likelihood Jan. 2010 Base: People who own a mobile phone
- 6. More Emphasis onMobility for Internet Connectivity Source: Yankee Group Anywhere Consumer: 2008 EU Web/Data Survey n 2007 = 2,500 n 2008 = 2,535 n 2009= 13,002 (6,338 for MP3 Player)
- 7. Time Spent WatchingVideo Q1 2009 Base: People with each device
- 8. Time Spent WatchingVideo Q1 2010 Base: People with each device
- 9. Agenda Drivers: Overthe Edge Cell Site Bingo Ethernet Everywhere Media Money Conclusions
- 10. Operational Cost Structurefor Mobile Must Change
- 11. 80% of networkoperational costs for the MNO are attributable to the RAN But… the RAN is continually changing: TDM Packet SONET/SDH Ethernet TDMA/CDMA UMTS/GSM/LTE MNO A MNO A+B+C A single MSO can be running three base stations from a cell site: GSM – Voice, low-speed data EDGE – Higher-speed data UMTS – Very high-speed data Where Are the Costs?
- 12. Projected Cell SiteGrowth Worldwide 8% 59,400 Africa 6% 1,219,000 Middle East and Asia Number of Cell Sites in 2009 Five-Year CAGR United States 245,100 7.5% South America 119,880 8% Europe 601,020 6% Australia/New Zealand 33,075 5%
- 13. A Brief Historyof Cell Site Penetration in the U.S. and What Has To Change Source: CTIA and Yankee Group, 2009 2009 value = 245 The voice offload model was the safe solution in 2008, but service providers, particularly wireline, cannot support parallel backhaul models and the resulting opex for another five years. Service providers are demanding strict SLAs, which are essential for IP voice and converged voice/data/video mobile networks. One-way jitter or 1-3 ms One-way latency 3-5 ms 99.999% availability Multiple SLAs and flows per user site The MNOs are looking to low-cost, simple, ubiquitous Ethernet for next-generation backhaul via dark fiber, MPLS, or SONET today, and MPLS-TP or PBB-TE in 2010 and beyond.
- 14. How Much BackhaulDo You Need To Support LTE? 10 Mbps backhaul 2009 50 Mbps Backhaul in two years
- 15. The Backhaul ChallengeYankee Group research shows that mobile network operators in the U.S. spent $6.7 billion on backhaul in 2009. This was for 245,000 cell sites supporting, on average, just under 10 Mbps of backhaul capacity. Globally, over $25 billion was spent in backhaul services in 2009. In 2012, there will be more than 300,000 cell sites in the U.S., each supporting, on average, 100 Mbps. If we were to just keep throwing T1s at the problem, this would result in a backhaul bill of $82 billion. The monthly average cost per site, per mile, would be about $23,000, compared to today’s average of $2,100.
- 16. Agenda Drivers: Overthe Edge Cell Site Bingo Ethernet Everywhere Media Money Conclusions
- 17. Ethernet: Compelling EconomicsEthernet service average $40 per month per Mb T1/E1 (1.54/2.048 Mbps) average cost $200-$800 per month U.S. average slightly over $300 per month 3G cell sites have smaller coverage footprint than 2G More cell sites with higher backhaul speeds mean greater impact on opex Ethernet bandwidth can be allocated remotely Increments as small as 1 Mb No lag time, no on-site visit
- 18. Example: 500-Node NetworkFor a 500-node network, Ethernet saves the MNO between 65% and 80% in bandwidth costs per year $2,400,000 $200,000 $400 Ethernet @ $40 per month per Mb $4,500,000 $375,000 $750 Ethernet @ $75 per month per Mb $12,600,000 $1,050,000 $2,100 7 T1s @ $300 per month per T1 Backhaul Cost Per Year: 500 Sites Backhaul Cost Per Month: 500 Sites Backhaul Cost Per Month: One Site 10 Mbps or equivalent to 500 sites
- 19. Ethernet Mobile BackhaulServices Requirements: Synchronization ITU SyncE IEEE 1588 Ethernet OAM EEE 802.1ag Connectivity Fault Management (CFM) ITU Y.1731 performance monitoring Emulation support: pseudo-wires Support for not only TDM circuits, but frame/cell services Ethernet mobile backhaul architecture alternatives Virtual private LAN service (VPLS) Multiprotocol label switching (MPLS) Ethernet transport All connect to the MPLS core network
- 20. Poll How farinto the Mobile Network will we push MPLS?
- 21. Agenda Drivers: Overthe Edge Cell Site Bingo Ethernet Everywhere Media Money Conclusions
- 22.
- 23. Regional Considerations asDrivers Availability of spectrum License costs Regulatory environment Labor costs General accounting practices Availability of fiber and copper infrastructure Ability to hold onto the copper infrastructure
- 24. Lease vs. OwnStrategies Incumbents: Leverage existing resources where possible, deploy new where necessary Challengers: Capital constrained and limited footprint; build out microwave or lease copper and fiber facilities Rural (both incumbent and challenger): Greater reliance on microwave backhauling to fiber rings where available
- 25. A Rural ChallengeWhat we expect to see in innovative implementation while waiting for the impact of the Broadband Regulatory Act Daisy-chain and Tree microwave implementations giving way to more stable, recoverable ring implementations High-speed copper DSL implementations supporting increased femto and Wi-Fi implementations
- 26. MNO Dominant BackhaulStrategies MNOs have a dominant, but not exclusive, strategy Microwave Paltel (Africa) Orange Hi Link Telecom (Middle East) Clearwire Telecom (Middle East) WIND Mobile (Canada) Sprint (Canada) Digicell Maxis (Malaysia) Fiber PTC Verizon SFR (France) 3 China Mobile DoCoMo T-Mobile Vodafone UK Leased Lines
- 27. Copper T1s widelyavailable DSL targeted at mobile backhaul from many including: ALU, Actelis, Hatteras, Positron As speed increases on the copper, four things have been common in the past: Move to asymmetrical send/receive speeds to give more bandwidth to downstream data Increase the number of copper pairs Increase the likelihood of electromagnetic fields (EMF) interference impacting other pairs in the cable Pairs had to be conditioned pairs Despite the news of its demise, copper technology has improved to the point where it is a viable, robust, available and inexpensive solution for mobile backhaul
- 28. Copper (cont.) Actelisjust introduced a solution offering 20 Mb over 2 pair Reduced pairs means reduced hardware costs, footprint, increased density per rack unit Will benefit from femto growth Does not sacrifice EFM performance, i.e., maintains ANSI T1.417 compliance In a lab test of “DSL Phantom Mode” this month, Bell Labs achieved downstream transmission speeds of 300 Mbps over distances up to 400 meters (or 100 Mbps at 1 km) on a single pair. Will not emerge as a product until 2012
- 29. Poll How longwill it be before we have no more than 5 percent of base stations connected via copper backhaul?
- 30. Trenching Fiber Costsinclude: right-of-way, construction, site reconstruction, fiber cable, connectors $221,760 $42 Urban $158,400 $30 Metro $63,360 $12 Rural Per mile Per foot Cost
- 31. Microwave Costs $3kto $8k including cabling, etc. Installation Not trivial – 5-10% of equipment costs per year Maintenance Up to $700 per month Site lease for antenna space Varies widely – can be below $200 per month in U.S. or over $2,000 per month in western Europe Licenses $4k to $10k per link based on antenna size, radio configuration and tower height Antennas, cable and power $4k to $50k depending on capacity and degree of redundancy Microwave backhaul systems
- 32. Microwave Start-Up CostsSource: Ceragon
- 33. Agenda Drivers: Overthe Edge Cell Site Bingo Ethernet Everywhere Media Money Conclusions
- 34. Adding It Up:Lower-Cost Mobile Backhaul Linear or near-linear growth in backhaul expense is not an option. Within the next five years, service providers will have to: Transition from TDM to packet-based backhaul Transition to fiber backhaul and microwave Simplify backhaul connectivity with Ethernet Unify voice and data, particularly for wireline mobile backhaul A focus on capex will not result in the least-cost network. Focus instead on: Operational costs (management, provisioning, spectrum licensing) Network design and architecture. Keep the low RAN flexible and the high RAN aggregation nodes scalable and robust. Business decisions. Share. Leverage someone else’s fiber, flexibility and economies of scale; use managed and outsourced RAN services.
- 35. Thank You www.yankeegroup.comJennifer Pigg, Research VP [email_address] Read analyst blogs at blogs.yankeegroup.com Watch analyst videos at youtube.com/yankeegroup Follow us on Twitter: @YankeeGroup Fan Yankee Group at facebook.com Upcoming Yankee Group webinar: Evolving Service Provider Business Models Tuesday, May 25, 2010 | 11 a.m. ET Register at www.yankeegroup.com
Editor's Notes
- #11 Backhaul transmissions costs can account for 40-60% of network OpEx – $22 billion in 2009.(??) Lots of room for operational squeeze. Backhaul and site leases must demand a smaller piece of the pie to succeed. One solution is to share the RAN. Many operator currently co-locate (to great financial advantage) at the Tower level with common antennas. However, they could also share node B and the complete backhaul network. A third party “tower operator” such as American Tower and Crown Castle could run the operation. Sounds good, but there are a couple of stumbling blocks: MNOs unwillingness to share network resources other than the tower. Highly fragmented nature of tower maintenance Facilities and construction orientation of tower operators.
- #12 If the multiple networks are connectes via T1s – Can’t be shared, wicked expensive, bandwidth not optimized, partially filled, can’t be realocated without an on site visit (avg 500-1000 per visit just to open the enclosure)
- #13 6% growth in MEA means approx 70K new cell sites this year – enormous growth. Understandable when you consider that India alone is bringing on mobile users at a blistering rate of 1million per week. NEC shipping 60K STM radio to India and that’s not enough. Number of users supported per site varies by region and by population density. In US cell site on average support 1000 users. In Europe this number can be as high as 2500. In rural areas the number can drop to 800 or less.
- #14 A significant part of the demand is reported to come from Brazil, China, India, and Russia, with China and India adding more than 150 million new mobile subscribers every year
- #15 AJIS LLC?
- #16 Background: A Tier 1 mobile carrier was operating a statewide network of more than 1,000 cell sites interconnecting with 2 primary mobile switching centers (MSCs). The carrier was spending more than $15 million annually on local access transport services for backhaul from the cell sites to the MSCs and interconnection from the MSCs to the local telephone company’s (LEC) access tandems. Planned 3G network upgrades promised to double T1 capacity requirements at more than 600 cell sites. BUSINESS CHALLENGE Reduce leased network transport costs in the face of planned capacity growth, while positioning the backhaul network to support 3G broadband data services. NETWORK SOLUTION CFN analyzed the wireless carrier’s embedded access transport circuits, costs, and growth requirements at the facilities level between the cell sites and the MSC, and between the MSC and the public switched network. Leveraging its FiberSource® design platform and network optimization tools, CFN designed an optimized fiber network that directly connected the MSCs and pushed interconnection points with the LEC out from the MSCs to 7 strategically placed LEC central office collocations. Working with one of the leading optical equipment vendors CFN and the vendor designed a managed optical transport platform to displace existing DS1, DS3, and SONET circuits that were at or past term. The platform displaced more than $8 million in gross circuit costs annually from the LEC and delivered net savings of more than $6 million per year. In addition, the optical transport platform was designed to deliver an aggregate capacity of more than 4,000 T1s which included 25% of the unused base capacity available for growth at no additional cost. The final solution included: A 60% savings on leased circuit costs A 30% net savings on backhaul and access transport costs Ability to double capacity on the platform for less than 20% incremental cost Seamless integration of TDM and Ethernet transport capabilities at each node.
- #18 For Ethernet Lower per meg cost as you move from 10meg to 100 to 1GigE. Costs increase linearly with T1/E1 Leased T3/E3 45Mbps services not at all prevalent because they are not readily delivered over copper - you ether give up the TDM and go DSL or you give up the copper and go COAX or HFC – in which case the tendency would be to pull fiber.
- #20 PW used by, for example 3G UMTS Facilitates the the common backhaul of multiple services, technologies and base stations on a common, flexible backhaul transport carrying any mix of traffic with varying QoS requirements In UMTS it was ATM in the past . About a year ago they stated going IP. First type of operator has been those that are MSO but own fixed. Now Mobile operators that own own infrastructure and going that direction as well. Where 3G is still in expansion phase they’re going all IP. Major shift now starting to happen. But the ones that are starting to adopt it are going large scale exsp Ecially in markets with easy access to Ehternet. Psuedowire – vast majority sill using them. Few operators that have deployed an IP based station and have leased an IP or Ethernet ptop eline service or VPLS élan. The fixed operator could be using either. MSO running their own stuff are using PSeudowire to manage their own sessions end-to-end. A VPLS end-to-end solutiosn is harder to manage end-t0-end. Routed layer three all the way to the cell site. A lot of mobile operators have had IP expertise in the core not out to the mitsos (central office). Doing pseduowire minisize IP expertise needed at edge. . Vodafone put it succinctly in a 2009 memo to potential backhaul suppliers addressing backhaul synchronization: “ Loss of synchronization causes data errors and dropped calls within a mobile network. Lab tests carried out by Vodafone with a mobile phone performing handover between not-synchronized cells have demonstrated great difficulty (resulting in low success rate) in performing handover during an active call… Vodafone will never consider rolling out a mobile backhaul solution if the 15 ppb [parts per billion] requirement cannot be ensured. In other words, synchronization is considered by Vodafone as fundamental as power!” affic separation as defined in MEF 22 sets guidelines for the number of service classes to use, a framework for bundling traffic types into a limited number of service class types, and the performance requirements for each of these classes. Traffic separation is important because of the wide range of services that are transported over the metro network, enforcing the traffic prioritization necessary to meet the synchronization requirements between the RAN BS and RAN NC. Can be used to backhaul in triple play service aggregation, not just the mobile network. IEEE 802.1ag Connectivity Fault Management (CFM), which enables the service provider to determine whether a particular service is being delivered to a customer (a finer level of granularity than merely detecting a faulty link in the network), ITU Y.1731 Performance Monitoring, which enables the service provider to analyze the packet loss or delay to validate service performance. Virtual private LAN service (VPLS) – Extends Ethernet Private LAN service to metro edge via VPLS optimized silicon in the edge router. Multiprotocol Label Switching (MPLS), and Ethernet transport. Can be PB, PBB or PBB-TE MPLS carrier core network that extends EMBS beyond the metro for global wireless operators.
- #23 Lot of move to fiber and microwave in NA and ROW, Europe has remained fairly stable in terms of media breakdown. Pros and Cons of each. 4 characteristics to examine with each: Maximum Speed Maximum Distance OPEX CAPEX Also need to consider ease of deployment, competitive issues, existing infrastructure US mainly fixed line because microwave spectrum was not widely available when the networks were rolled out. In Europe there was spectrum and extortionary pricing from former PTTs Industry transitioning to Fiber (seemingly unlimited bandwidth) And Microwave – low CAPEX, fast, flexible, appropriate for high percentage of carrier that do not own their facilities. With high order cancellation, combination of multiple radios and channel sharing with interference cancellation microwave can meet GigE needs Microwave can have high capex with cost of spectrum VDSL should not be discounted. Cost effective alternative for MNOs leasing backhaul (at potentially exorbidant rates) With the use of bonding and vectoring you can create a virtual ½ gig VDSL2 channel (5 VDSL2 links at 100mbps each) over a distance of 500 meters (1/3 mile). Remember, can’t use repeaters with VDSL.
- #24 Some carriers are able to depreciate their fiber installs over 20 years. Microwave, however, is most likely to be treated as CAPEX and depreciated over 5-8 years “The demand for copper in many of the world’s developing nations has caused the price to soar to $3 a pound.” Nevertheless the cost of the cable is trivial to the damage and service outage. “British Telecom set up its own dedicated squad to clamp down on a crime that was costing the company more than $5.5 million a year, Compute Scotland reported.” While problems with thefts in Africa are well publicized – It happens every where and does appear to be having on impact on installations.
- #25 Operators – in North America they have outsourced a lot, and have leased from their wire line side almost like they are a third party. Where they can get wireline from their peer that’s what they’ll do and then go to a third party. In some cased they see them deploying microwave and then going with fewer, higher capacity connections and fewer providers.
- #26 Had oppotrunity to speak with MA congress about rural deployments Daisy chain or tree with microwave then backhauling the fiber. Doxen cell sites down stream need protection (unlike the ones at the end of the spur) Like actuarial tables. With ring – makes a little more sense. Two Ethernet VLANS per base station one provisioned each and one provisioned west or you have an IPMPLS switching node and.
- #27 Leased lines in these examples are predominantly DSL - Vodaphone and SFR are both transitioning to microwave Vodaphone uses leased lines in UK – but migratedy to microwave long ago (1995) in Italy to avoid leased lines there T-Mobile 95% leased lines – rest microwave AT&T deploying Femtos to residential broadband customers Clearwire has at least a couple of Millimeter wave vendors on site Digicel – Guadalupe, Martinique, Guyana – Tough terrain and weather Orange UK and Orange Spain – over 95% microwave as challenger in these countries.
- #28 Spelling the death of T1s and E1s.. Or 4x as many customers (twice the distance) or half the pairs (saving leased costs for the copper pairs, less footprint, fewer ports.) They are increasing the signal to noise ratio. T1’s available from anyone DSL targeted at backhaul from many including: ALU, Actelis, Hatteras, Positron Reduced Pairs means reduced HW costs, footprint, increased density per rack unit. Also will benefit from Femto growth eliminate impact on ADSL/ADSL2+ services without sacrificing EFM performance (e.g. maintaining ANSI T1.417 compliance) In a lab test of “DSL Phantom Mode”, Bell Labs achieved downstream transmission speeds of 300 Megabits per second (Mbps) over distances up to 400 meters (or 100Mbps at 1km). At these speeds, service providers will be able to maximize the ability of the existing copper infrastructure - widely deployed around the world - to satisfy demand for bandwidth-intense residential triple-play and business services, for years to come. SHDSL offers some real advantages over ADSL/VDSL. We’re doing just as much upload as we are downlode and a symmetric based solution is the way go. Actelis will be able to take advantage of expected growth in Femto deployment. Markets are doing very well. Actelis’ patented Dynamic Rate Boost™ (DRB) and Dynamic Spectral Shaping (DSS) DRB Can offer 20meg over 2 pair. Or 4x as many customers (twice the distance) or half the pairs (saving leased costs for the copper pairs, less footprint, fewer ports.) They are increasing the signal to noise ratio. Spelling the death of T1s and E1s. Competitors do not understand the regulatory environment in different countries – Actelis does automatic spectral compliance which ensure that the Actelis solution operates according to the in country spectrum regulations. Actelis Enhance “Spectral Friendliness” Reduce impact on other binder services DSL has ben used, particularly in Europe for data offload for years. MSOs; Quick word about the MSOs ability to offer robust backhaul services Outside US, UK and Germany cable footprint is limited. As shared media, HFC can be problematic in performing as a robust backhaul technology with guaranteed QoS. Where they have presence as well as fiber – MSOs are well positioned to offer backhaul services.
- #29 Spelling the death of T1s and E1s.. Or 4x as many customers (twice the distance) or half the pairs (saving leased costs for the copper pairs, less footprint, fewer ports.) They are increasing the signal to noise ratio. T1’s available from anyone DSL targeted at backhaul from many including: ALU, Actelis, Hatteras, Positron Reduced Pairs means reduced HW costs, footprint, increased density per rack unit. Also will benefit from Femto growth eliminate impact on ADSL/ADSL2+ services without sacrificing EFM performance (e.g. maintaining ANSI T1.417 compliance) In a lab test of “DSL Phantom Mode”, Bell Labs achieved downstream transmission speeds of 300 Megabits per second (Mbps) over distances up to 400 meters (or 100Mbps at 1km). At these speeds, service providers will be able to maximize the ability of the existing copper infrastructure - widely deployed around the world - to satisfy demand for bandwidth-intense residential triple-play and business services, for years to come. SHDSL offers some real advantages over ADSL/VDSL. We’re doing just as much upload as we are downlode and a symmetric based solution is the way go. Actelis will be able to take advantage of expected growth in Femto deployment. Markets are doing very well. Actelis’ patented Dynamic Rate Boost™ (DRB) and Dynamic Spectral Shaping (DSS) DRB Can offer 20meg over 2 pair. Or 4x as many customers (twice the distance) or half the pairs (saving leased costs for the copper pairs, less footprint, fewer ports.) They are increasing the signal to noise ratio. Spelling the death of T1s and E1s. Competitors do not understand the regulatory environment in different countries – Actelis does automatic spectral compliance which ensure that the Actelis solution operates according to the in country spectrum regulations. Actelis Enhance “Spectral Friendliness” Reduce impact on other binder services DSL has ben used, particularly in Europe for data offload for years. MSOs; Quick word about the MSOs ability to offer robust backhaul services Outside US, UK and Germany cable footprint is limited. As shared media, HFC can be problematic in performing as a robust backhaul technology with guaranteed QoS. Where they have presence as well as fiber – MSOs are well positioned to offer backhaul services.
- #32 Maintenance costs not trivial
- #33 Separate tower install used in the example is a worse case scenario – generally the microwave radio would share a tower with the RAN.
- #35 Background: A Tier 1 mobile carrier was operating a statewide network of more than 1,000 cell sites interconnecting with 2 primary mobile switching centers (MSCs). The carrier was spending more than $15 million annually on local access transport services for backhaul from the cell sites to the MSCs and interconnection from the MSCs to the local telephone company’s (LEC) access tandems. Planned 3G network upgrades promised to double T1 capacity requirements at more than 600 cell sites. BUSINESS CHALLENGE Reduce leased network transport costs in the face of planned capacity growth, while positioning the backhaul network to support 3G broadband data services. NETWORK SOLUTION CFN analyzed the wireless carrier’s embedded access transport circuits, costs, and growth requirements at the facilities level between the cell sites and the MSC, and between the MSC and the public switched network. Leveraging its FiberSource® design platform and network optimization tools, CFN designed an optimized fiber network that directly connected the MSCs and pushed interconnection points with the LEC out from the MSCs to 7 strategically placed LEC central office collocations. Working with one of the leading optical equipment vendors CFN and the vendor designed a managed optical transport platform to displace existing DS1, DS3, and SONET circuits that were at or past term. The platform displaced more than $8 million in gross circuit costs annually from the LEC and delivered net savings of more than $6 million per year. In addition, the optical transport platform was designed to deliver an aggregate capacity of more than 4,000 T1s which included 25% of the unused base capacity available for growth at no additional cost. The final solution included: A 60% savings on leased circuit costs A 30% net savings on backhaul and access transport costs Ability to double capacity on the platform for less than 20% incremental cost Seamless integration of TDM and Ethernet transport capabilities at each node.