Transmission Network Strategies (Shared Backhaul)


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Transmission Network Strategies (Shared Backhaul)

  1. 1. Shared Back Haul Solutions Network Strategies Monday 16th November 2009 Allan Oakman Business Development Manager
  2. 2. The case for shared Back Haul Agenda • Current environment impacting strategies • The response to reduce costs • The opportunity and solutions 1
  3. 3. Arqiva Wireless Access Terrestrial Broadcast Satellite & Media TV transmission Scale and worldwide footprint Wireless Access • All UK TV channels (incl. BBC, ITV, C4, C5) The acquisition and integration of Inmedia & Largest independent UK site provider • 1,154 UK national TV broadcast site network BT Satellite brings substantial growth in • 24,000 marketable sites, urban and rural • Key focus on analogue to Digital Switchover worldwide reach and capability • 9,000 built sites, ~ 8,000 for cellular (DSO) by 2012 • 100+ earth stations at 10 teleports in UK, • Provider of design, build and installation Radio transmission US & France services plus backhaul • All BBC and circa 300 national, regional and Services to broadcast, media & enterprise • Support services to emergency and other local commercial radio services on AM, FM, • Playout services, outside broadcast public sector organisations and DAB • Occasional use for sports and news • Private Mobile Radio networks and services TV multiplexing • Uplinking of over 400 channels worldwide • Own and operate two of the six Freeview DTT • Mobile data solutions • Carrier and enterprise connectivity multiplexes Your network Full managed service Mobile Data Applications Back Haul Services of broadcast networks Play-out on long term contracts Managed Services Developing network • Exploits latest generation MW and fibre technology Services, people & managed services • Tackles infrastructure and investment required for existing and future Back Haul Private Mobile Operations Radio (PMR) Services • Proposes flexible managed Back Haul solutions to multiple MNO and Enterprise sectors in the country – represents significant opportunity for legacy & future access (LTE) networks skills • Arqiva plays key role in Infrastructure – Site infrastructure Site management Airwave Teleport – Investment in appropriate technology – Optimised use of spectrum Broadcast Wireless site Public Safety Satellite – Promoting alternative Back Haul solutions to traditional approaches customers customers customers customers 2
  4. 4. Mobile Data Traffic Demand Operators always find it difficult to prepare for demand tomorrow by rolling out capacity today; under or overestimating demand has serious implications on operator’s bottom line Cellular Traffic Demand Growth (TeraBytes/ Hour) Growth of UK Mobile internet users 10 8.1 8.1 190 TB 8 7.5 Unique Audiences (millions) 6 150 TB 6 5.7 110 TB 4 70 TB 2 30 TB 0 2009 2012 2015 2108 2021 2024 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Source : Ofcom Predicting Areas of Spectrum Shortage 2009 Source : Ofcom Communication Market Report 2009 MNO’s Network Challenges • Prediction of demand for new services • How much capacity should they build? • Length of time it takes to upgrade and deploy a back haul network • Availability of back haul spectrum may impact the strategies that can be deployed 3
  5. 5. Existing Strategies and Options Operators have exploited obvious cost reduction strategies through shared network models based on consolidation of infrastructure. Innovative solutions previously considered unacceptable are now being considered MNO1 MNO1 • Site Share – towers and sites with MNO2 MNO2 separate base station equipment savings of ~ 40% against site Opex costs • Site Share with RAN share – Recent announcement of merger between Orange UK and T-Mobile savings of more than €4 billion (£3.5 billion) • Back Haul sharing using both self provide and leased service providers are being implemented RNC/BSC Shared RAN and • Cost saving initiatives are dependent on backhaul consolidation partnering agreements • Driving down cost base associated with Separate Core suppliers will provide limited benefits Core Core MNO1 MNO2 • Consolidation is creating uncertainties 4
  6. 6. Shareable Back Haul – leased services The extent of leased services varies by MNO strategy but typically for 3G and future LTE ~ 55% of network connectivity is forecast to be delivered by leased services. This is likely to increase. • Typical product in UK assumes delivery by fibre based on incremental bandwidth supporting TDM, ATM and Ethernet – Synchronisation typically provided by discreet E1 – Zero contention to defined bandwidth threshold – Typical Services assume 10Mb, 30Mb and 60Mb • Current leased services utilising Microwave may require additional connection charges to cater for 3rd party MW dish rental and cost of hardware changes to support Ethernet based network solutions • Typical architecture assumes network would require ~ 45% of sites served by MW due to lack of available fibre with aggregation at fibre POP for 2nd mile connection TDM/Ethernet over Radio Traditional EPC Leased Service Provider TDM/Ethernet over Fibre TDM/Ethernet using xDSL MNO fibre network DSLAM Self Provide MW Access NW Leased Services 5
  7. 7. Synergies and Optimised Cost Reductions Operators are examining cost saving initiatives based on individual Opex sectors. The value of grouping multiple sectors & initiatives under a single service provider will increase due to synergies • Shared services on common sites provide opportunities in the following Site Infrastructure areas: Provider Site Infrastructure – Site rental Provider Site Infrastructure – Antenna Sharing Provider – RAN sharing Back Haul Back Haul Services – Back Haul sharing lue Services Back Haul Services • Providers capable of delivering aggregated savings offer greatest V a potential and benefit to MNO’s Base Station • Back Haul sharing is only feasible where Vendor Base Station both service provider and customer Base Station Vendor Vendor requirements are satisfied Outsourced Managed Svc – Contention Provider Outsourced – Disparate QoS capabilities Managed Svc – Scale & Growth potential Outsourced Provider Managed Svc – Commercially attractive Provider • Architectures will involve use of MW and associated Opex costs New Service Propositions 6
  8. 8. Shared Back Haul potential A shared transmission network can potentially deliver > 30% cost savings per operator but can be enhanced where 3rd party site providers provide the service. MNO’s Network Challenges Constraints • Back haul networks are a mixture of self Delivery by MW may be limited by licensed provide MW and leased services spectrum but can be managed through use of hybrid architectures • Leased service providers often limit service to a single MNO/Entity Neutral host transmission network Independent transmission network Cost per sharer • Prediction of demand for new services split across geographic locations is not clear • Uncertainty of bandwidth demand is Cost savings of circa 30% if impacting upgrade strategies associated two operators share transmission with upgrading legacy networks • Implementation of network upgrades take longer than expected and impact both customer experience and costs • Latest generation MW can compete with fibre service offerings but spectrum availability & costs are problematic* 1 2 3 4 5 * Estimated to ~ 400Mbp Number of shares 7
  9. 9. Use of Flexible Leased Services Key Advantages of Flexible Network Outsourcing Solutions • Predictable cost to MNO’s without need for large scale Capex programmes • SLA’s/ QoS capable of managing real and non real time traffic tailored to MNO requirements • MNO’s need not worry about Network/Technology where service provider guarantees performance • Options to consider extend lifecycle legacy networks through gradual migration onto leased services • New options to provide both permanent and temporary network connectivity solutions • Providers who own spectrum can provide an alternative managed service proposition to traditional providers Point to Point Logical Overlay Point to Multipoint k Lin H PD M TD cy ga Le X 8
  10. 10. Integrating Point to Point/Multipoint Solutions • Developed network Back Haul strategies tend to use a mix of PTP and fibre based solutions • The deployment of PMP solutions is inhibited by the availability of licensed spectrum or risks associated with using unlicensed spectrum – WiMax options on Back Haul may provide an additional alternative – Lack of capacity is considered to be a problem but capacities of 250Mb – 600Mb per sector are achievable • PMP solutions are capable of integrating PtP within the same platform, extending range and service options • Arqiva owns suitable spectrum and sites and is well placed to offer hybrid solutions • LTE PMP Backhaul solution for London: • 145 Cell sites – 30Mbps (Mean) • 8 Hub sites (4x28MHz) Source: Cambridge Broadband 9
  11. 11. Use of Optimised Bandwidth on Leased Services • Customer self provide provision bandwidth x Mbps and associated opex costs. Utilisation < 100% • Managed service provider dimensions total bandwidth to target customers’ PCR • Actual aggregated traffic levels typically below sum of customer PCR • Statically multiplex gain over managed service provider network • Source: Cambridge Broadband • MNO Self Provide networks dimensioned to assumed growth for future use • Bandwidth and Opex related spectrum fixed limits scope for optimisation of costs relative to service • Managed service provider has a reduced cost base through aggregation and optimisation to ensure PCR and SLA’s are achieved. • New Managed services can provide mix of guaranteed + best effort within defined QoS class across multiple customers • Increased competition between service providers benefiting MNO’s 10
  12. 12. Managing Disparate Service Requirements Managed back haul services are changing with increased interest by MNOs’ in aggregating benefits and disparate savings associated with Back Haul and site related costs. Service Solution • Move from traditional approaches to flexible wider ranging managed services will be critical in achieving cost reduction across the sector. A growth of more cost effective solutions will deliver enhanced savings • Migration to a flat I.P based network can be achieved including the provision of optimised back haul for legacy networks Technology Impacting Strategies Management & Control • Adaptive Modulation and increased spectral • Each customer has unique SLA and QoS efficiencies providing increased bandwidth on capable of being managed within a total MW back haul bandwidth domain • Ability to use both PtP and PtMP overlay • Compliance and reporting capabilities through solutions using service provider spectrum NMS on a per link basis and/or network • Transmission optimisation techniques • Use of VLAN and QoS parameters to increasing overall customer experience discriminate and manage traffic flows • Reduced costs to provider are passed on to • Capable of hand off to 2nd mile service provider customers with low cost per Mb or MNO fibre/exchange aggregation point 11
  13. 13. Challenging the Total Cost of Ownership A managed transmission service can deliver >30% NPV savings on TCO over five years per operator £600 Millions TCO - MNO TCO - Neutral host £500 £400 £300 £200 £100 £0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 1 Year 2 Year 3 Year 4 Year 5 TCO – MNO1 £204 m £286 m £368 m £450 m £532 m TCO - Neutral host1 £94 m £187 m £281 m £374 m £468 m 12 1 Based on total 13,000 links a mixture of fixed line and Microwave links
  14. 14. Summary • Delays associated with network consolidation will lead to poor customer experience through back haul bottlenecks • A new flexible managed service solution will support network growth • Grouped cost reduction strategies are most effective • Cost savings are most likely to be achieved through innovative Back Haul strategies • Legacy infrastructure can have an extended life cycle • Hybrid solutions and managed services will resolve Back Haul bottlenecks 13
  15. 15. Thank you 14
  16. 16. Typical Gains using Transmission Optimisation • Use of Back Haul optimisation is not new • Historically limited use in last mile access network • Clear advantages • Multiple vendors providing solutions Source: Cambridge Broadband – Cost of integration and operational managed issues 15