Fronthaul: The New Paradigm for Enabling the Het-Net


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iGR White Paper, August 2013

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Fronthaul: The New Paradigm for Enabling the Het-Net

  1. 1. Fronthaul: The New Paradigm for Enabling the Het-Net White Paper August 2013
  2. 2. Page 1 Executive Summary Mobile   bandwidth   demand   is   rapidly   increasing   around   the   world.   In   North   America,  iGR  expects  that  by  2017  the  consumption  of  mobile  data  per  month   will  increase  more  than  six  times  over  its  level  in  2012.  But,  the  deeper  issue   gets   lost   in   this   statistic.   Within   any   given   geographic   market,   there   will   be   locations  where  the  mobile  data  network  will  be  unable  to  meet  the  average   level  of  data  demand  simply  due  to  the  congregation  of  large  numbers  of  users.   iGR   has   modeled   the   bandwidth   demands   and   network   capacity   for   several   markets   and   shown   that   ‘pain   points’   exist   in   the   network.   For   example,   in   Chicago,  iGR  forecasts  that  by  2017  the  demand  for  mobile  data  that  exceeds   the   network’s   capacity   will   be   16   times   greater   than   it   was   in   2012.   In   other   words,  while  the  average  demand  for  mobile  data  may  only  increase  by  6  times,   the  demand  at  specific  times  (and  locations)  in  Chicago  will  actually  increase  by   a  factor  of  16.     To  address  this  problem,  mobile  operators  have  to  deploy  new  network  capacity   at  these  specific  locations  to  address  the  demand  at  certain  times  during  the   day.  This  is  the  ideal  application  for  small  cells  (including  remote  radio  heads,   DAS,   WiFi   and   pico/metrocells),   which   provide   added   capacity   at   specific   locations.  The  key  underlying  behind  the  overall  increase  in  average  use  and  the   sharp  spike  in  localized  use  is  simple:  more  people  use  more  smart  devices  and   data-­‐intensive  services  over  LTE.  In  the  U.S.  alone,  iGR  estimates  there  will  be   186   million   LTE   connections   by   2017,   comprising   52   percent   of   the   total   connections.     While   there   are   challenges   to   small   cell   deployment   (cost,   location   and   the   availability  of  suitable  backhaul),  iGR  believes  their  wide-­‐spread  deployment  is   inevitable   and   that   the   industry   will   solve   the  implementation   issues.   For   the   mobile  operator,  flexibility  will  be  required  when  designing  and  building  small   cell  networks.     The  reality  is  that  the  major  mobile  operators  do  not  know  which  solution  will   be  best  in  a  particular  market.  But,  they  are  in  the  process  of  figuring  it  out.  The   Tier  1  U.S.  mobile  operators  have  already  conducted  small  cell  trials  and  some   initial  deployments  using  a  combination  of  metrocells  and  remote  radio  head   cells.     In  the  first  part  of  2014,  it  appears  that  the  majority  of  the  outdoor  small  cell   deployments   in   the   U.S.   are   likely   to   be   remote   radio   heads,   which   will   be   connected  to  baseband  units  located  in  a  central,  secure  location.  A  backhaul   connection   will   then   connect   the   baseband   units   to   the   EPC   (the   operator’s   core).     Moving   forward,   operators   will   likely   need   a   range   of   radio,   fronthaul   and   backhaul   solutions.   By   taking   a   ‘tool   box’   approach   to   small   cell   deployment   (since  the  availability  of  suitable  locations,  power,  spectrum  and  backhaul  vary  
  3. 3. Page 2 in   each   market   for   each   mobile   operator),   mobile   operators   will   require   the   assistance  of  a  wide  range  of  vendors  from  cable  MSOs  and  fiber  providers  (for   fronthaul  and  backhaul)  to  picocell,  DAS  and  metrocell  OEMs.     The  importance  of  providing  a  quality  fronthaul/backhaul  connection  to  a  small   cell  cannot  be  overemphasized.  The  success,  or  failure,  of  the  het-­‐net  and  small   cell   architecture   depends   on   the   operator’s   ability   to   deploy   fronthaul   and   backhaul  that  is  appropriate  to  both  the  immediate  data  demand  and  what  is   forecasted.  One  such  example  comes  from  South  Korea,  where  SK  Telecom  used   SOLiD  networking  equipment  and  extensive  use  of  existing  3G  fiber  backhaul  to   reduce  the  time  required  to  launch  LTE.   SK  Telecom  and  SOLiD’s  architecture  used  the  existing  legacy  transport  system   complemented   by   two   fiber   rings   for   the   LTE   deployment.   LTE   remote   radio   heads   (RRHs)   were   connected   to   SOLiD’s   Infinity   ACCESS   RT   and,   in   this   deployment,  the  RRHs  acted  as  small  cells  that  were  mounted  on  towers.  The   transport  system  then  provided  connectivity  back  to  the  BSC/RNCs  and  to  the  IP   core.   This  approach  created  several  advantages  for  SK  Telecom  –  or  for  any  operator   that  might  implement  a  similar  solution  –  including  the:   • Maximum  re-­‐use  of  existing  fiber  infrastructure  to  reduce  the  need  for  new   fiber  runs  which  ultimately  reduced  the  time  to  market  and  capital  costs.     • Ability   to   quickly   add   more   ONTs   to   the   fiber   rings   so   as   to   support   additional  RAN  capacity  when  needed.     • Support   of   multiple   small   cells   on   a   single   fiber   strand.   This   is   critical   to   reducing  costs  and  having  the  flexibility  to  scale.     • Reduction  of  operating  expenses.   • Increased  reliability  due  to  the  use  of  fiber  rings  with  redundancy.   • Support   for   both   licensed   and   unlicensed   RAN   solutions,   including   WiFi.   Thus,   the   fronthaul   architecture   could   support   LTE   and   WiFi   RANs   on   the   same  system.     As  a  result  of  its  implementation,  SK  Telecom  rolled  out  a  new  LTE  network  in  12   months   rather   than   24   and   reduced   operating   expenses   in   the   first   year   by   approximately   five   percent.   By   2014,   SK   Telecom   expects   an   additional   50   percent  OpEx  savings  due  to  the  new  architecture.    
  4. 4. Page 3 Why Mobile Networks Need Small Cells For   the   last   couple   of   years,   the   demand   for   mobile   data   on   the   world’s   networks   has   been   rapidly   increasing   as   the   penetration   of   smartphones   and   connected  tablets  rises,  and  by  network  upgrades  to  LTE.  This  trend  is  true  in  all   regions,   but   especially   in   the   developed   markets.   For   example,   by   2017,   iGR   expects   the   consumption   of   mobile   data   per   month   in   North   America   to   increase  more  than  six  times  over  its  level  in  2012  (Figure  1).     Figure 1: North America Mobile Data Consumption (GB per month), 2012 - 2017   Source:  iGR,  2013   Currently,  LTE-­‐enabled  devices  are  a  relatively  small  percentage  of  total  devices   in  the  market,  but  they  are  already  driving  substantial  amounts  of  data  traffic.   For  example,  Verizon  Wireless  has  publicly  stated  that  half  of  the  mobile  data   traffic  it  carries  now  flows  over  LTE.  Over  the  remainder  of  2013  and  into  2014,   iGR  expects  LTE  penetration  to  greatly  increase  across  all  of  the  national  carriers   and  that  will  drive  truly  significant  levels  of  mobile  data  traffic  over  those  LTE   networks.   Network “Pain Points” To  combat  this  situation,  mobile  operators  are  evolving  their  cellular-­‐only  radio   access  networks  (RANs)  to  an  integrated,  heterogeneous  network  that  includes   small   cells   (pico,   metro,   micro),   remote   radio   reads   (RRH),   femtocells,   distributed   antenna   systems   (DAS)   and   WiFi   technology,   along   with   a   reengineered  mobile  backhaul  network  that  is  comprised  of  fiber  and  Ethernet.   In  short,  mobile  operators  are  working  to  increase  their  supply  of  mobile  data  –   i.e.,  the  capacity  of  their  3G  and  4G  data  networks.   0   200,000   400,000   600,000   800,000   1,000,000   1,200,000   1,400,000   2012   2013   2014   2015   2016   2017  
  5. 5. Page 4 Het-­‐nets  (or  heterogeneous  networks)  are  a  necessary  development  for  mobile   networks   since   the   demand   for   bandwidth   is   not   uniform   across   a   mobile   network.  While  the  average  mobile  data  used  will  increase  across  the  board,  the   demand   for   data   bandwidth   at   specific   points   in   the   network   may   increase   much  more  quickly.  These  ‘pain  points’  are  created  by  existing  and  new  usage   habits.  For  example,  newer  devices,  especially  tablets,  encourage  people  to  ‘sit,   view  and  browse’,  rather  than  move  through  the  network  as  was  the  case  with   cellular  voice  calls.  They  also  reflect  the  general  shift  in  usage  away  from  simple   voice  and  texting,  to  IP  data.     What is a ‘small cell’? From   iGR’s   perspective,   the   term   ‘small   cells’   includes   several   different   solutions:   • Metrocells   are,   as   compared   to   conventional   tower-­‐mounted   macrocells,   low   power   cell   sites   that   operate   on   an   operator’s   licensed   frequency   to   (today)  provide  additional  coverage  and/or  capacity  in  a  given  urban  area.   There  are  three  types  of  metrocells:  those  that  operate  on  3G  only,  4G  only   or  those  that  can  operate  on  both.   • Residential   femtocells   are   one   way   mobile   operators   can   improve   the   quality  of  their  subscribers’  cellular  voice  service  (and  provide  data  service  if   needed),  primarily  from  the  standpoint  of  creating  or  improving  coverage   inside  a  home.  Most  residential  femtocells  deployed  in  the  U.S.  today  were   rolled  out  to  improve  coverage  for  high-­‐value  customers.     • A  picocell  is,  in  essence,  a  larger  femtocell  that  is  deployed  into  a  business   or  small  venue.  The  typical  picocell  is  physically  larger  than  a  femtocell,  has   a  higher  power  output  (between  100  to  150  milliwatts)  and,  consequently,   has  a  longer  range  and  the  ability  to  support  a  larger  area,  traffic  capacity   and/or   more   concurrent   users   (typically   up   to   32).   The   central   premise   behind   picocells   is   that   they   will   (likely)   be   deployed   to   provide   better   indoor  voice  and  data  coverage  on  licensed  cellular  bands.   • A   Distributed   Antenna   System   (DAS)   is   a   wireless   architecture   that   is   characterized   by   multiple   antennas   that   are   physically   distributed   throughout   a   given   in-­‐building   our   outdoor   venue   and   interconnected   via   some   type   of   cabling   to   a   base   station   transceiver   that   sits   in   the   main   distribution  frame  of  a  building.  (Note  that  there  are  several  ways  to  build   and   architect   a   DAS;   what   is   presented   here   is   a   simplistic   view.)   DAS   systems  are  typically  deployed  to  improve  both  the  voice  and  data  coverage   on  licensed  cellular  bands  in  venues  with  a  particularly  high  density  of  users.   Many   sports   arenas,   airports,   office   buildings,   etc.,   across   the   U.S.   have   installed  DAS  to  improve  the  wireless  service  for  guests.     • A  Remote  Radio  Head  (RRH)  architecture  physically  splits  the  radio  from  the   baseband   in   the   typical   base   station.   Instead   of   having   both   radio   and   baseband   located   at   the   bottom   of   the   tower   (and   then   connecting   the  
  6. 6. Page 5 radio  to  the  antenna  with  coax),  the  RRH  is  mounted  at  the  top  of  the  tower   and   is   then   connected   (via   fiber   optic   using   CPRI)   to   the   baseband.   The   baseband  can  be  up  to  50  KM  away  and  located  in  a  data  center  or  other   secure   location.   RRHs   can   be   located   anywhere,   such   as   on   the   top   of   buildings  or  on  roof  tops.  This  flexibility  makes  them  attractive  to  operators   needing   to   provide   additional   capacity   and   coverage   in   specific   locations.   Note  that  RRHs  have  been  deployed  in  many  global  markets  as  part  of  more   advanced  3G  and  initial  LTE  implementations.  In  the  U.S.,  many  more  RRH   deployments  are  expected  later  in  2013  and  into  2014  as  part  of  the  major   mobile  operators’  initial  small  cell  installations.   • WiFi,   too,   has   become   (ironically)   a   much   relied   upon   network   for   “offloading”  traffic  –  both  indoors  and  outdoors.  And,  as  Passpoint  (Hotspot   2.0)  moves  through  its  trial  phases  and  hits  the  mainstream  by  mid  2014,   access   to   WiFi   for   end   users   should   become   more   convenient.   With   the   eventual   introduction   of   ANDSF,   network   operators   will   be   able   to   “hot-­‐ switch”  a  user  from  3G/4G  to  WiFi  and  back  again  based  on  various  network   quality  parameters  (note  that  this  capability  is  subject  to  the  resolution  of   various  technical  hurdles).   • Repeaters   and   signal   boosters   are   also   classed   by   many   as   ‘small   cells’,   since   they   provide   coverage   to   specific   locations   (such   as   in   homes   and   buildings).  However,  since  they  are  not  part  of  a  managed  carrier  network,   signal  boosters/repeaters  are  typically  not  included  as  part  of  the  het-­‐net.   Small Cell Deployment Challenges All  types  of  small  cells  share  the  same  three  basic  challenges  when  it  comes  to   deployment:   • Spectrum  and  interference  management   • Location  and  power   • Backhaul.   Many  mobile  operators  are  struggling  with  the  debate  of  quality  of  service  (QoS)   versus  total  cost  of  ownership  (TCO).  In  other  words,  should  the  small  cell  be   placed   where   the   backhaul   is   available   or   should   it   be   placed   in   the   optimal   location,   regardless   of   backhaul   availability?   iGR   believes   that   the   small   cell   must  be  located  where  it  is  needed  and  not  simply  ‘nearby.’     While  a  small  cell  will  off-­‐load  traffic  from  the  macrocell  (and  therefore  benefit   the  whole  macrocell),  simply  locating  the  small  cell  near  to  where  it  is  needed   (to  coincide  with  the  available  backhaul)  does  not  appear  to  provide  as  much   additional  capacity  as  when  the  small  cell  is  located  precisely  where  it  is  needed.   In  fact,  the  available  capacity  may  be  cut  by  half  compared  to  optimal  location   of  the  small  cell.  But  given  that  the  precise  location  may  not  be  available,  or   only  available  at  a  high  cost,  or  have  other  issues  associated  with  it,  operators   have  yet  another  variable  to  consider.    
  7. 7. Page 6 Moving Forward From  iGR’s  perspective,  the  het-­‐net  deployment  is  inevitable  –  the  industry  will   have  to  move  in  this  direction  to  meet  the  bandwidth  demands  in  the  next  few   years.   It   is   also   clear   that   the   industry   will   solve   the   issues,   although   some   challenges  will  take  longer  than  others.   iGR  believes  that  the  majority  of  the  initial  outdoor  small  cell  deployments  in   the  U.S.  will  be  remote  radio  heads  connected  to  the  baseband  units  that  are   hosted  in  a  central,  secure  location  (the  term  used  to  describe  the  architecture   is  ‘fronthaul’).  A  backhaul  connection  will  then  connect  the  baseband  units  to   the  EPC.  This  architecture  is  discussed  in  more  detail  in  the  next  section.  Note   that  several  major  mobile  operators  are  planning  major  small  cell  deployments   in  the  next  two  years  using  a  combination  of  DAS,  RRH,  metrocells  and  WiFi.   Ultimately,  iGR  believes  the  biggest  challenge  will  be  to  build  a  flexible  network   architecture  that  can  grow  and  adapt  with  the  changing  user  base,  and  can  do   this  cost  effectively.    The  future  evolution  of  the  networks  will  be  discussed  at   the  end  of  this  paper.  
  8. 8. Page 7 Small Cell Fronthaul and Backhaul Solutions The  importance  of  providing  a  quality  fronthaul/backhaul  connection  to  a  small   cell  cannot  be  overstated.  The  success  or  failure  of  the  het-­‐net  and  small  cell   architecture  depends  on  the  operator’s  ability  to  deploy  suitable  fronthaul  and   backhaul.  Many  solutions  have  been  proposed  for  small  cell  backhaul  including   fiber,   microwave   (both   LOS   and   NLOS),   and   cable   TV   networks.   The   reality   is   that,   when   possible,   operators   prefer   to   deploy   fiber,   given   capital   and   operating  cost  limitations.   As  an  example  of  how  new  network  architectures  can  be  supported,  SK  Telecom   (SKT)  in  Korea  deployed  its  LTE  network  with  an  innovative  fronthaul-­‐backhaul   architecture  using  SOLiD  Technologies  networking  equipment.  Rather  than  build   an   entirely   new   backhaul   network,   SKT   leveraged   its   existing   3G   backhaul   network  to  support  its  planned  LTE  deployment.  This  reduced  capital  expense   and  the  time  needed  to  launch  LTE  services.  SKT  calls  the  new  architecture  SCAN   or  Smart  Cloud  Access  Network  –  this  is  discussed  in  more  detail  later  in  this   section.   Fronthaul architecture One  of  the  new  concepts  that  has  recently  been  implemented  in  a  commercial   mobile  network  is  fronthaul.  As  Figure  3  shows,  the  term  fronthaul  refers  to  the   connection   from   the   remote   radio   heads   to   the   aggregated   base   band   units   (which   may   be   located   in   a   central   office   or   data   center).   That   traffic   is   then   backhauled  from  the  base  band  units  to  the  IP  core  or  EPC.     Figure 2: Mobile Network Architecture with Fronthaul and Backhaul   Source:  iGR,  2013  
  9. 9. Page 8 Note  that  the  above  is  a  logical  diagram  and  that  in  practice  many  remote  radio   heads,  regardless  of  where  they  are  mounted,  can  be  ‘fronthauled’  to  hosted   baseband  units.  To  provide  redundancy  and  limit  costs,  it  is  optimal  to  fronthaul   multiple  RRHs  (and/or  other  types  of  small  cells)  on  a  fiber  ring.   Figure  4  shows  a  physical  implementation  of  SOLiD’s  fronthaul  architecture.  This   is  a  current  implementation  and  the  architecture  is  viable  today.     In  the  example,  the  existing  legacy  transport  system  is  complemented  by  two   fiber   rings   for   the   LTE   deployment.   LTE   remote   radio   heads   (shown   in   the   diagrams  as  “RE”  or  radio  equipment)  are  connected  to  the  Infinity  ACCESS  RT.   In   this   case,   the   RE/RRHs   are   acting   as   small   cells   despite   being   depicted   as   mounted   on   conventional   towers.   The   transport   system   provides   connectivity   back  to  the  BSC/RNCs  and  to  the  IP  core.   Figure 3: SOLiD Infinity ACCESS: RAN Application   Source:  SOLiD,  2013   Potential advantages Using  the  above  approach  has  several  advantages  for  the  mobile  operator:   • The   architecture   makes   maximum   use   of   existing   fiber   infrastructure   to   reduce   time   to   market   and   capital   costs.   Note   that   the   cost   of   laying   additional  fiber  runs  could  be  prohibitive  for  small  cells  –  the  use  of  existing   strands  is  therefore  important.  For  mobile  operators  deploying  small  cells,   this  is  a  critical  issue,  as  it  allows  for  the  cost-­‐effective  reuse  of  existing  fiber   infrastructure  from  the  power  utilities,  cable  MSOs  or  LECs.  
  10. 10. Page 9 • Changes   can   be   made   quickly   since   additional   ONTs   can   be   added   to   the   fiber   rings   to   support   additional   RAN   capacity   as   needed.   Again,   this   approach  is  appealing  to  the  current  fiber  providers  (including  cable  MSOs   and  LECs)  who  can  expand  the  use  of  their  current  infrastructure.   • Multiple  small  cells  can  be  supported  by  a  single  fiber  strand  –  this  is  critical   to  the  reduced  costs  and  the  flexibility  to  scale.  Also,  since  small  cells  must   be  placed  exactly  where  they  are  needed  to  address  capacity  ‘pain  points’,   the  link  between  the  cell  and  existing  fiber  runs  can  be  minimized  –  i.e.,  a   new  fiber  strand  is  not  required  to  support  each  and  every  cell.   • Operating  expenses  are  also  reduced  since  the  need  for  new  real  estate  is   reduced.   • Increased  reliability  due  to  the  use  of  fiber  rings  with  redundancy.   • While  this  example  shows  remote  radio  head  and  existing  macro  cells,  the   architecture   can   support   both   licensed   and   unlicensed   RAN   solutions,   including   WiFi.   Thus,   an   operator   could   use   the   fronthaul   architecture   to   support   LTE   and   WiFi   RAN   on   the   same   system.   This   approach   has   been   adopted   by   the   infrastructure   OEMs,   many   of   whom   have   acquired   small   cell  and  WiFi  solutions,  or  developed  multi-­‐standard  small  cells.   The   next   section   details   the   savings   realized   by   one   operator,   SK   Telecom,   in   Korea  through  the  use  of  this  type  of  architecture.   SK Telecom case study SK   Telecom   (SKT)   in   Korea   deployed   its   LTE   network   with   an   innovative   fronthaul-­‐backhaul   architecture.   Rather   than   build   an   entirely   new   backhaul   network,  SKT  leveraged  its  existing  3G  backhaul  network  to  support  its  planned   LTE   deployment   using   SOLiD   networking   equipment.   This   reduced   capital   expense   and   the   time   taken   to   launch   LTE   services.   SKT   calls   the   new   architecture  SCAN  or  Smart  Cloud  Access  Network.   Figure  5  below  shows  the  architecture  of  part  of  the  network  in  the  Gangnam   area  of  Seoul,  South  Korea.  The  architecture  consists  of  fiber  rings  for  2G/3G   (purple)   and   LTE   (blue   and   orange).   The   fiber   rings   connect   the   base   station   nodes   with   SOLiD’s   Infinity   ACCESS   RT,   which   then   support   the   remote   radio   heads  (blue)  via  CPRI/OBSAI.  Note  that  the  system  used  in  Gangnam  has  nine   fiber  rings  for  2G/3G  (only  two  are  shown)  and  14  fiber  rings  for  LTE  (four  are   shown)  to  support  approximately  170  remote  radio  heads.   Across   South   Korea   as   a   whole,   SKT   has   used   this   architecture   to   support   approximately  12,000  base  station  nodes  and  80,000  remote  radio  heads.  The   base   station   nodes   (or   ‘digital   units’)   are   located   in   centralized   COTs   (Central   Office  Terminal)  or  DU  Centers.  This  centralization  reduces  the  complexity  of  the   network  and  maintenance  and  operating  costs.  
  11. 11. Page 10 Each  rings  consists  of  a  single  fiber.  Wavelength  Division  Multiplexing  (WDM)   from   SOLiD   Technologies   is   used   to   support   the   LTE   traffic,   with   Ethernet   for   WiFi   and   E1/T1   for   the   legacy   2G/3G   network.   The   network   uses   SCAN-­‐WM   (Wavelength  Multiplexing)  and  HSFP  (High-­‐density  Small  Form  factor  Pluggable)   modules   to   ease   deployment;   this   is   one   of   the   unique   aspects   of   the   architecture,  enabled  by  SOLiD.  Up  to  30  remote  radio  heads  can  be  supported   per  base  station  node.  Also,  fiber  sharing  is  used  to  reduce  the  number  of  fiber   strands   required   to   the   minimum   –   again,   this   is   enabled   by   SOLiD’s   unique   architecture.   Figure 4: SK Telecom Gangnam SCAN architecture     Source:  SK  Telecom,  2013   SKT’s   SCAN   network   took   approximately   12   months   to   deploy.   The   company   estimates  that  using  a  traditional  architecture  with  new  fiber  would  have  taken   three  or  more  years.  Much  of  the  time-­‐saving  was  due  to  the  ability  to  reuse   part  of  the  existing  2G/3G  fiber  network  for  SCAN.   Based  on  conversations  with  SK  Telecom,  iGR  notes  the  following  benefits  from   the  fronthaul/backhaul  SCAN:  
  12. 12. Page 11 • Implementation   time   for   the   LTE   network   was   cut   by   approximately   two   years  to  just  12  months  due  to  the  ability  to  re-­‐use  much  of  the  legacy  fiber   network.   • The  network  supports  multiple  networking  protocols  allowing  SK  Telecom  to   deploy   WiFi   hotspots   with   Ethernet,   for   example,   on   the   same   fiber   network.   • The   use   of   the   HSFP   modules   reduced   CapEx   considerably   as   it   supports   higher   capacity   (up   to   16   channels)   and   hence   reduced   the   need   for   additional  fiber  runs.   • Operating   expenses   were   reduced   in   the   first   year   by   approximately   5   percent.   By   2014,   SK   Telecom   expects   50   percent   savings   due   to   SCAN.   Savings  have  been  realized  through  reduced  building  lease  and  rental  costs,   reduced  utilities,  reduced  maintenance  and  fewer  truck  rolls.   Economic drivers for RRH and fronthaul architecture The  use  of  remote  radio  heads  by  the  Tier  1  mobile  operators  around  the  world   is  increasing  as  LTE  is  deployed  and  then  expanded.    And  as  discussed  earlier  in   this  paper,  iGR  expects  additional  RRH  deployments  as  operators  move  to  het-­‐ net  architectures.  This  in  turn  means  that  increasing  use  of  fronthaul/backhaul   architectures  will  be  needed  to  support  the  RRH  deployments.   For   the   mobile   operators,   there   are   several   economic   drivers   supporting   the   combination  of  RRH,  fronthaul/backhaul  and  base  station  ‘hoteling’:   • Location  –  since  RRHs  are  much  smaller  than  traditional  cell  sites  (since  the   baseband   is   located   in   a   central   data   center),   they   are   typically   easier   to   locate.    RRH  are  also  lighter,  require  less  power  and  have  better  aesthetics   than   traditional   tower-­‐mounted   macrocells.     Metrocells   and   picocells   also   enjoy  many  of  these  benefits.   • Flexibility  –  with  a  RRH  architecture,  the  baseband  is  located  in  a  central   data  center  while  the  RRH  is  located  at  the  required  site.    The  baseband  can   be  upgraded  independently,  if  needed,  and  without  the  need  to  visit  the  cell   site.    Similarly,  the  fronthaul  (between  the  RRH  and  the  baseband)  can  be   reconfigured   to   make   best   use   of   the   available   resources.   And   if   a   RRH   needs   to   be   moved   (to   accommodate   changing   coverage   or   capacity   requirements,  for  example),  only  the  RRH  (and  its  fronthaul),  and  not  the   baseband,  needs  to  be  moved.   • Reduced  maintenance  –  RRHs  have  enclosed  power  supplies  and  generally   do  not  require  environmentals  (heating,  AC,  etc)  since  they  usually  rely  on   passive   heating   and   cooling.   A   fiber   connection   (typically   using   CPRI)   connects   the   RRH   to   the   baseband   in   the   data   center   and   a   short   coax   connects  the  RRH  to  the  antenna  on  the  tower  or  building.  This  results  in   improved  reliability  and  hence  reduced  OpEx.  And  since  the  basebands  are  
  13. 13. Page 12 all  located  centrally  in  a  secure  data  center,  maintenance  does  not  require  a   trip  to  each  cell  site.   • Ability   to   reuse   existing   networking   –   RRHs   mounted   on   buildings   or   in   downtown   areas   can   generally   take   advantage   of   existing   fiber   networks   from   commercial   providers.     If   no   fiber   is   available   at   the   exact   location   needed,   a   fiber   loop   is   usually   a   short   distance   away.     The   ability   to   use   commercial  networks  can  reduce  CapEx  and  OpEx  compared  to  the  mobile   operator  having  to  build  a  dedicated  backhaul  network.    
  14. 14. Page 13 Future Network Evolution Mobile  operators  will  need  to  deploy  het-­‐nets  and  small  cells  in  order  to  meet   the   increasing   demand   for   mobile   data   and   to   provide   capacity   where   –   and   when  –  it  is  needed.    In  fact,  many  Tier  1  mobile  operators  already  have  plans  to   start   small   cell   deployments   in   2014.   The   challenge,   however,   is   not   just   to   provide  more  mobile  data  capacity  but  to  match  the  capacity  with  the  changing   behaviors  of  the  subscribers  –  data  demand  ‘pain  points’  that  occur  at  different   places  in  the  network  and  move  as  consumers  move  through  a  metro  market.       The  reality  is  that  the  major  operators  do  not  know  which  het-­‐net  or  small  cell   solution   will   be   best   in   a   particular   market.   But,   they   are   in   the   process   of   figuring  it  out.  The  major  mobile  operators  have  already  conducted  small  cell   trials  and  some  initial  deployments  –  larger  roll  outs  will  start  in  2014  and  2015.   Initially,  it  appears  that  the  majority  of  the  outdoor  small  cell  deployments  in   the   U.S.   are   likely   to   be   remote   radio   heads   combined   with   fronthaul   and   backhaul  as  described  earlier.   Note   that   iGR   believes   that   since   the   mobile   operators   are   not   fixated   on   a   single  architecture  moving  forward,  a  hybrid  approach  to  het-­‐net  deployment   will   likely   be   used.   This   will   mean   that   the   same   operator   will   deploy   and   support  DAS,  RRH,  metrocells,  picocells  and  even  WiFi  to  provide  the  coverage   and  capacity  needed.   Changing business drivers iGR   believes   that   the   biggest   characteristic   of   a   successful   future   network   architecture  will  be  flexibility,  both  in  deployment  and  in  operations.    Mobile   operators  are  faced  with  the  business  challenge  of  needing  to  provide  far  more   data  capacity  for  little  or  no  revenue  growth.  Therefore,  lowering  the  cost  of   operations  is  crucial.  In  the  near  future,  iGR  expects  the  discussion  in  the  mobile   industry  to  shift  away  from  how  to  deploy  small  cells  to  a  debate  about  how  to   operate  and  manage  het-­‐nets  and  small  cells  effectively.   Consider  the  example  shown  in  Figure  5  –  this  is  for  a  Tier  1  mobile  operator  in  a   major  U.S.  metro  market.    While  the  revenue  is  expected  to  grow  by  1.6  times  in   this  market,  demand  for  mobile  data  bandwidth  increases  by  12.3  times.    Thus,   the   operator   must   be   able   to   provide   far   more   data   capacity   for   a   minimal   increase  in  operating  expenses,  if  operating  margins  are  to  be  maintained.   To   be   able   to   match   the   increasing   demand   for   mobile   data   with   minimal   increases   in   revenue,   mobile   operators   will   have   to   change   the   way   their   networks  are  architected  and  managed.    iGR  believes  that  SK  Telecom  has  taken   the  initial  steps  with  its  SCAN  architecture  and  that  over  the  next  few  years,  the   efficiency   of   the   fronthaul/backhaul   approach   will   increase.   Note   that   SK   Telecom   has   stated   that   they   expect   a   50   percent   decrease   in   operating   expenses  due  to  SCAN  in  2014  –  obviously,  this  goes  some  way  to  allowing  the   operator  to  reduce  the  cost  of  each  gigabyte  of  data  delivered.  
  15. 15. Page 14 Figure 5: Major U.S. Metro Market – comparison of revenue and bandwidth demand growth   Source:  iGR,  2013   Evolving network architectures In  the  next  24  months,  iGR  believes  mobile  operators  will  need  to  consider  a   number  of  strategies  to  meet  these  operating  efficiency  goals:   o A  range  of  radio,  fronthaul  and  backhaul  solutions.  By  taking  a  ‘tool  box’   approach   to   small   cell   deployment   (since   the   availability   of   suitable   locations,   power,   spectrum   and   backhaul   vary   in   each   market   for   each   mobile   operator),   mobile   operators   will   require   the   assistance   of   a   wide   range   of   vendors   from   cable   MSOs   and   fiber   providers   (for   fronthaul   and   backhaul)  to  picocell,  DAS  and  metrocell  OEMs.  Much  of  the  success  of  SKT’s   SCAN   architecture   (including   short   implementation   time   and   lower   operating   expenses)   comes   from   the   extensive   reuse   of   existing   3G   fiber   backhaul  for  its  new  LTE  network.   o As  the  number  of  small  cells  increases,  mobile  operators  such  as  SKT  must   be   able   to   reuse   what   is   already   available   –   simply   building   entire   new   networks  is  not  an  option.  Flexibility  in  deployment  is  therefore  key  to  lower   costs  and  as  SKT  and  SOLiD  have  demonstrated,  this  is  possible  today.   o The   fronthaul/backhaul   architecture   will   also   have   to   support   increased   radio  access  network  virtualization.    While  mobile  operators  today  usually   own  their  RANs,  in  the  next  few  years  it  is  likely  that  operators  will  connect  
  16. 16. Page 15 to  third  party  RANs.  This  shift  may  become  necessary  to  acquiring  access  to   a  specific  location  or  to  reducing  operating  costs  in  a  specific  building,  for   example.    The  mobile  operator’s  network  must  therefore  be  flexible  enough   to  connect  to  a  neutral-­‐host  or  shared  network  as  necessary,  even  in  the   middle  of  an  existing  metro  market.   o Increased   distribution   of   the   mobile   network   also   means   that   the   fronthaul/backhaul  network  will  change  –  simply  put,  the  boxes  which  must   be   connected   could   be   in   multiple   locations   across   a   metro   market   or   region.   And   as   the   network   capacity   increases,   new   hardware   may   be   deployed  at  new  data  centers  owned  by  the  operator  or  by  a  third  party.     The  fronthaul/backhaul  network  must  therefore  adapt  these  changes  while   reducing  operating  expenses.   o While   cost   of   network   operation   will   become   increasingly   critical,   it   is   extremely   important   for   mobile   operators   to   also   provide   for   a   quality   fronthaul/backhaul   connection   to   any   type   of   small   cell   they   implement.   The  success,  or  failure,  of  the  het-­‐net  and  small  cell  architecture  depends  on   the   operator’s   ability   to   maintain   network   quality   for   the   subscriber   –   market  competition  is  such  that  any  operator  offering  sub-­‐standard  service   will  be  quickly  punished  by  the  market.     Using   SK   Telekom’s   experience   as   a   benchmark   shows   how   other   mobile   operators   can   realize   similar   operating   gains   in   their   networks.     And   more   importantly,  architect  their  fronthaul/backhaul  networks  to  be  able  to  meet  the   changing  needs  of  the  business.  
  17. 17. Page 16 About iGR iGR   is   a   market   strategy   consultancy   focused   on   the   wireless   and   mobile   communications  industry.  Founded  by  Iain  Gillott,  one  of  the  wireless  industry's   leading  analysts,  we  research  and  analyze  the  impact  new  wireless  and  mobile   technologies  will  have  on  the  industry,  on  vendors'  competitive  positioning,  and   on  our  clients'  strategic  business  plans.   Our   clients   typically   include   service   providers,   equipment   vendors,   mobile   Internet   software   providers,   wireless   ASPs,   mobile   commerce   vendors,   and   billing,   provisioning,   and   back   office   solution   providers.   We   offer   a   range   of   services   to   help   companies   improve   their   position   in   the   marketplace,   clearly   define  their  future  direction,  and,  ultimately,  improve  their  bottom  line.     A  more  complete  profile  of  the  company  can  be  found  at  www.iGR-­‐   Methodology To  prepare  this  white  paper,  iGR  interviewed:   • Major  operators  in  North  America,  Asia  Pacific  and  Europe,  with  emphasis   on  small  cells  and  fronthaul/backhaul  solutions   • Small  cell  vendors  and  infrastructure  OEMs   • Fiber  and  facilities  providers.   Disclaimer The  opinions  expressed  in  this  white  paper  are  those  of  iGR  and  do  not  reflect   the   opinions   of   the   companies   or   organizations   referenced   in   this   paper.   All   research  was  conducted  exclusively  and  independently  by  iGR.  This  white  paper   was  sponsored  by  SOLiD  but  SOLiD  personnel  were  not  involved  in  the  carrier   interviews  or  in  the  ongoing  research.