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Optimizing Wireless Backhaul           Makes Mobile Broadband Profitable             Survey of Vendor Approaches          ...
Outline         • Costs of RAN & Macrocell Backhaul Today         • Vendor Estimates of Costs         • New Vendor Approac...
Microwave Backhaul is buried in Costs of RAN Today            RAN Costs as Percent CAPEX are Frequently Quoted ………        ...
What Percentage are Backhaul Costs for MacroCell Architecture ? Up to 20% OPEX            3G Backhaul Costs as Percent Tot...
Backhaul Evolution for Macrocells                                         Evolution from 2G & 3G to LTE                   ...
Mobile Backhaul OPEX Savings from Next Gen. Packet Backhaul           “Today Backhaul transport… accounts for more than 30...
Business Case Drives towards     Carrier Ethernet & Private Packet                                                   NSN: ...
Backhaul Savings come not only from IP Evolution,but from Wireline Offload and shift to Ethernet from TDM         Case 1. ...
Carrier Ethernet Mobile Backhaul Solution- end to end Fixed Transport Evolution                                     BTI We...
Microwave Point To Point or Multipoint?September 28th. 2011 email: srudd@strategyanalytics.com   Copyright© Strategy Analy...
Microcells Change the Game: Topology Microcell Ring, Tree and Branch, Star Hub and Multi-PointSeptember 28th. 2011 email: ...
Microcells Change the Game: PTP has Geometric Growth in No. Outdoor Units (ODUs)September 28th. 2011 email :srudd@strategy...
Three Scenarios Compared: LTE Macro, 3G, LTE small Cells                                Backhaul provisioning requirements...
Three Scenarios for PMP % of CAPEX for PTP, E-Band & Fibre: LTE Macro, 3G, LTE small Cells                                ...
Three Scenarios for PMP % of OPEX for PTP, E-Band & Fibre: LTE Macro, 3G, LTE small Cells                                 ...
Summary • Key Drivers for Profitability Backhaul Profitability     Capacity Utilization     Scalability     IP Networki...
Contact Information                                           Sue Rudd                              Director, Service Prov...
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BBWF 2011 Sue Rudd - Strategy Analytics - Optimizing Wireless Backhaul

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Broadband World Forum 2011 - Sue Rudd - Strategy Analytics - Optimizing Wireless Backhaul

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BBWF 2011 Sue Rudd - Strategy Analytics - Optimizing Wireless Backhaul

  1. 1. Optimizing Wireless Backhaul Makes Mobile Broadband Profitable Survey of Vendor Approaches Broadband World Forum Master Class Wednesday September 28th 14.50 pm Presented by Sue Rudd srudd@strategyanalytics.com Director Service Provider Analysis, Strategy AnalyticsSeptember 28th. 2011 email: srudd@strategyanalytics.com Copyright© Strategy Analytics 2011
  2. 2. Outline • Costs of RAN & Macrocell Backhaul Today • Vendor Estimates of Costs • New Vendor Approaches for Cost Savings • Impact of Small Cell Topologies on Backhaul Costs • Key Drivers for Mobile Broadband BackhaulSeptember 28th. 2011 email: srudd@strategyanalytics.com Copyright© Strategy Analytics 2011 2
  3. 3. Microwave Backhaul is buried in Costs of RAN Today RAN Costs as Percent CAPEX are Frequently Quoted ……… .....but include Cell Site Backhaul over Microwave RAN Percentage of Capital Expenditures in Mobile Network Topologies Today is 80% - 90% Source Cisco: ‘Monetizing the Mobile Internet’ 2010September 28th. 2011 email: srudd@strategyanalytics.com Copyright© Strategy Analytics 2011 3
  4. 4. What Percentage are Backhaul Costs for MacroCell Architecture ? Up to 20% OPEX 3G Backhaul Costs as Percent Total at 15, 30+ & 50 percent Utilization Depreciated CAPEX % Total RNC/BSC Costs % Total Radio Backhaul Transport Packet TOTAL Controller 15% Utilization 82.93% 2.73% 8.91% 2.73% 2.70% 100% 30+ % Utilization 69.35% 4.91% 16.01% 4.89% 4.85% 100% 50% Utilization 60.24% 1.20% 36.14% 1.20% 1.20% 100% OPEX (Shared w. 2G) % Total RNC/BSC Costs % Total Radio Backhaul Transport Packet TOTAL Controller 15% Utilization 83.16% 2.48% 9.41% 2.48% 2.48% 100% 30+ % Utilization 69.69% 4.46% 16.94% 4.46% 4.46% 100% 50% Utilization 20.00% 20.00% 20.00% 20.00% 20.00% 100% Source Ericsson Business Review #2 2010: ‘Mobile broadband – busting the myth of the scissor effect’ & SA EstimatesSeptember 28th. 2011 email: srudd@strategyanalytics.com Copyright© Strategy Analytics 2011 4
  5. 5. Backhaul Evolution for Macrocells Evolution from 2G & 3G to LTE NSN : ‘Mobile Backhaul The Power Behind LTE’ http://www.nokiasiemensnetworks.com/sites/default/files/document/Mobile_backhaul_for_LTE_0.pdfSeptember 28th. 2011 email :srudd@strategyanalytics.com Copyright© Strategy Analytics 2011 5
  6. 6. Mobile Backhaul OPEX Savings from Next Gen. Packet Backhaul “Today Backhaul transport… accounts for more than 30 % of technical operation costs ..” “Overall Savings from Packet can be 60% of Transport Costs” “Carrier Ethernet Transport Breaks the Linear Relationship Between Capacity and Cost.” NSN SAVINGS Reduced Cell Site Costs - Single Interface - All Transport 25% IP & Centralized Management 80% Optimization across IP, Ethernet & Optical 30% Overall Transport Cost Reduction from Full IP 60% NSN Exec Summary: ‘Mobile Backhaul Power Behind LTE’ http://www.nokiasiemensnetworks.com/sites/default/files/mobilebackhaul_executive_summary.pdf ‘Staying profitable in a booming mobile broadband environment’ http://www.nokiasiemensnetworks.com/portfolio/products/mobile-broadband/mobile-backhaulSeptember 28th. 2011 email: srudd@strategyanalytics.com Copyright© Strategy Analytics 2011 6
  7. 7. Business Case Drives towards Carrier Ethernet & Private Packet NSN: Typical Business case Analysis H € NSN Business White Paper: ‘Optimize backhaul to increase mobile data profits’ http://www.nokiasiemensnetworks.com/sites/default/files/document/Optimize_backhaul_to_increase.pdfSeptember 28th. 2011 email :srudd@strategyanalytics.com Copyright© Strategy Analytics 2011 7
  8. 8. Backhaul Savings come not only from IP Evolution,but from Wireline Offload and shift to Ethernet from TDM Case 1. Tellabs 60 Base Station Business Case Analysis – IP/MPLS Savings - 60% Case 2. Tellabs HSDPA Business Case Analysis – Wireline Offload Savings - 93% Case 3. Tellabs Scalability Business Case Analysis – Gigabit Ethernet Savings – 47% Tellabs Business Case: ‘Tellabs® Mobile Backhaul Solutions Support Cost-effective, Scalable and Reliable Network Growth’ http://www.tellabs.com/solutions/mobilebackhaul/tlab_mobilebackhaulbizcase.pdfSeptember 28th. 2011 email :srudd@strategyanalytics.com Copyright© Strategy Analytics 2011 8
  9. 9. Carrier Ethernet Mobile Backhaul Solution- end to end Fixed Transport Evolution BTI Webinar ‘Mobile Backhaul: Exploring an All-Packet Approach’ http://event.on24.com/r.htm?e=343623&s=1&k=EFE962FAA43893EECEAD39F14FD9AC4ESeptember 28th. 2011 email :srudd@strategyanalytics.com Copyright© Strategy Analytics 2011 9
  10. 10. Microwave Point To Point or Multipoint?September 28th. 2011 email: srudd@strategyanalytics.com Copyright© Strategy Analytics 2011 10
  11. 11. Microcells Change the Game: Topology Microcell Ring, Tree and Branch, Star Hub and Multi-PointSeptember 28th. 2011 email: srudd@strategyanalytics.com Copyright© Strategy Analytics 2011 11
  12. 12. Microcells Change the Game: PTP has Geometric Growth in No. Outdoor Units (ODUs)September 28th. 2011 email :srudd@strategyanalytics.com Copyright© Strategy Analytics 2011 12
  13. 13. Three Scenarios Compared: LTE Macro, 3G, LTE small Cells Backhaul provisioning requirements (mbps) = max (peak sector throughput ; busy-time mean traffic x number of sectors)September 28th. 2011 email: srudd@strategyanalytics.com Copyright© Strategy Analytics 2011 13
  14. 14. Three Scenarios for PMP % of CAPEX for PTP, E-Band & Fibre: LTE Macro, 3G, LTE small Cells • Leased fibre has the lowest CAPEX as the operator has only to pay for terminal equipment fees to set up the service • For wireless solutions, CAPEX is lowest for PMP because it requires less equipment, which translates to savings in both equipment and installation • Year 1 Base Case:  PMP Capex is” • 69% of PTP • 53% of E-band • 227% leased fibre • Compare to 5 Year Cum. CAPEX Per RAN SiteSeptember 28th. 2011 email: srudd@strategyanalytics.com Copyright© Strategy Analytics 2011 14
  15. 15. Three Scenarios for PMP % of OPEX for PTP, E-Band & Fibre: LTE Macro, 3G, LTE small Cells • Opex is the Dominant Element of the Total Cost of Operations • OPEX is 10X greater than CAPEX • Fibre, assuming the operator is leasing from a third party is the most expensive • Year 1 Base Case:  PMP Opex is” • 47% of PTP • 53% of E-band • 11% leased fibre • Compare to 5 Year Cum. Opex Per RAN SiteSeptember 28th. 2011 email :srudd@strategyanalytics.com Copyright© Strategy Analytics 2011 15
  16. 16. Summary • Key Drivers for Profitability Backhaul Profitability  Capacity Utilization  Scalability  IP Networking  Selective Offload to Fixed Network at ‘Edge’  Carrier Ethernet  Multipoint Options for Small Cells • Multiple Types of Backhaul to Optimize Different Mobile Broadband Configurations & • Heterogeneous Backhaul Transport & Topologies for HetNets…September 28th. 2011 email :srudd@strategyanalytics.com Copyright© Strategy Analytics 2011 16
  17. 17. Contact Information Sue Rudd Director, Service Provider Analysis Strategy Analytics www.strategyanalytics.com email: srudd@strategyanalytics.comSeptember 28th. 2011 email:srudd@strategyanalytics.com Copyright© Strategy Analytics 2011 17

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