Mobile network operators (MNOs) are increasingly focused on meeting the explosive demand for data services. Deploying small, below-the-clutter cells is another technique to solve the capacity ‘hot spot’ problem as well as to provide service in ‘coverage holes’ in mobile networks that were designed primarily to carry voice traffic. However, there are technical and economic constraints that prevent network operators from deploying small cells: backhaul is one such constraint. This paper describes the value proposition of BLiNQ’s NLOS wireless backhaul solution and compares its total cost of ownership to that of optical fiber.

1. NLOS Wireless Backhaul for
Small Cell Base Stations
Total Cost of Ownership Comparison
with Optical Fiber
By Frank Rayal
VP, Product Management
BLiNQ Networks Inc.
WHITEPAPER
October 22, 2010

2. Table of Contents
Introduction .................................................................................................................................................. 3
Mobile Backhaul Options .............................................................................................................................. 3
BLiNQ Networks Solution Overview ............................................................................................................. 5
Cost of Spectrum........................................................................................................................................... 6
Comparative Analysis to Fiber Backhaul ....................................................................................................... 8
Conclusion ................................................................................................................................................... 11
NLOS Wireless Backhaul for Small Cell Base Stations: 2
Total Cost of Ownership Comparison with Optical Fiber

3. Introduction
Mobile network operators (MNOs) are increasingly focused on meeting the explosive demand for data
services. Deploying next generation systems, acquiring additional spectrum and offloading data traffic
from the mobile network are a few ways that MNOs have used to increase the offered capacity.
Deploying small, below-the-clutter cells is another well tried technique that has been used repeatedly to
solve the capacity ‘hot spot’ problem as well as to provide service in ‘coverage holes’ in mobile networks
that were designed primarily to carry voice traffic.
The mobile Internet, and corresponding data traffic, is expected to further increase the requirement for
small cell deployment as no one solution can single-handedly meet the capacity demand forecast.
However, there are technical and economic constraints that prevent network operators from deploying
small cells: backhaul is one such constraint. BLiNQ Networks recognizes that eliminating the ‘backhaul
problem’ would provide MNOs a decisive tool in their quest to scale network performance to meet the
demands of the mobile Internet.
BLiNQ’s product portfolio comprises solutions specifically targeted at backhaul applications for small
cells that are deployed below the building clutter as would be the case in urban areas where capacity
demand is highest and coverage requirements are hardest to meet. The products provide high capacity
point-to-multipoint links in a non-line-of-sight deployment configuration. Furthermore, the products
implement interference detection and mitigation techniques to reduce interference in the backhaul
network thereby gaining capacity and performance.
This paper describes BLiNQ’s value proposition for wireless operators and compares the total cost of
ownership of NLOS wireless backhaul to that of optical fiber.
Mobile Backhaul Options
Different backhaul options have been used for wireless base stations. Each option has its economic and
technical advantages and disadvantages. These options can be summarized as follows:
1- Leased-lines: Provide a dedicated channel and symmetric data rate. A leased line, in the form of
copper T1/E1 line, have data rate of 1.544/2.048 Mbps. Although leased lines have been widely
used in mobile backhaul, they are increasingly becoming unsuitable for the following reasons:
a. Multiple T1/E1’s are required per cell site to support the capacity requirements of 3G
(e.g. HSPA) and 4G (LTE) cell sites. Figure 1 shows the peak throughput for UMTS
evolution. Although these are peak rates at the physical layer and highly unlikely to be
reached in practice, the number of required leased lines will increase correspondingly.
b. T1/E1 lines are leased at rates that can easily reach $1,000 per month per line (pricing
depends on location and service provider). This makes the annual cost of backhaul for a
single 3G/4G base station extremely high.
c. Leased lines are fundamentally a TDM technology (Time Domain Multiplexing) while
recent 3G and 4G base stations are based on Ethernet/IP technology. A special interface
NLOS Wireless Backhaul for Small Cell Base Stations: 3
Total Cost of Ownership Comparison with Optical Fiber

4. (e.g. pseudowire) is required in this case which further adds cost to leased line backhaul
deployments.
The above reasons make leased lines an unattractive method to backhaul 3G/4G wireless
base stations. Industry experts concur that leased lines will play a limited role in backhauling
future wireless base stations.
Figure 1 UMTS Evolution Peak Data Rates.
2- Microwave Backhaul: Microwave backhaul typically operates at frequencies above 6 GHz
(typically 11-42 GHz) and requires line-of-sight between the two backhaul nodes. It is also a
point-to-point solution. Microwave backhaul can provide high data rates starting from a few
hundreds of Mbps and functions over relatively long range. It has been used significantly for
mobile backhaul applications particularly by non-incumbent operators and those in emerging
markets as microwave backhaul is quick to deploy and offers a competitive business case.
Unfortunately, traditional microwave is not suitable where a base station is mounted below the
surrounding building clutter: in non-line-of-sight conditions obstacles between the two backhaul
nodes (e.g. buildings, trees, etc.) attenuate the power received by the remote node and distort
the signal such that communication is not possible. Traditional microwave is not an option in
backhauling small cell sites where clearance of the first Fresnel zone is not possible.
3- Fiber Backhaul: Fiber, where present, offers ample bandwidth: it meets the capacity
requirements of next-generation wireless base stations. However, fiber can be expensive to
provide in areas where it is not already available. The cost of installing fiber (trenching, right-of-
way) can be prohibitive in exactly the same areas where small base stations are required such as
in the dense urban core, as shown in Table 1. The cost of leasing fiber is also high and can range
from several hundred dollars to over $1,000 per month. Additionally, fiber deployment time can
be lengthy resulting in delays in bringing a new cell site on air.
NLOS Wireless Backhaul for Small Cell Base Stations: 4
Total Cost of Ownership Comparison with Optical Fiber

5. Table 1 Typical Cost of Fiber.
Aerial $4.5-$11.5
Deployment Costs
Rural $10-$30
(per meter; Includes right of way and
Trenching Suburban $30-$100
renovation construction works)
Urban $80-$230
Fiber Cost
(per meter; includes cable, $5-$12
connector, & testing)
In summary, fiber is the only feasible alternative to backhaul small cell sites as it has none of the
technical issues of traditional microwave and offers higher capacity than leased lines. However, the
business case for fiber is not always competitive, particularly in areas where fiber is not available. In
addition to economics, the current lack of alternative solutions to fiber provides a significant
competitive advantage to incumbent operators: they have the incentive to expand fiber networks at the
expense of competing MNOs.
Table 2 Applicability of Backhaul Options to Compact Base Stations.
Leased Line LOS Microwave Fiber
Capacity
NLOS Operation Not Applicable Not Applicable
Fiber is the only feasible alternative to backhaul next generation wireless base stations.
BLiNQ Networks Solution Overview
BLiNQ’s solution comprises a point-to-multipoint (PMP) backhaul solution that operates in non-line-of-
sight conditions (NLOS). The solution operates in time domain duplex access mode (TDD) in licensed
band frequencies below 6 GHz. Spectrum in bands such as 2.3 GHz, 2.5 GHz and 3.3-3.8 GHz is available
at relatively low prices. The solution combines the latest innovations in physical and medium access
layer techniques to provide high capacity backhaul links for compact base stations. Managed Adaptive
Resource Allocation (MARA), a key BLiNQ intellectual property which comprises interference reduction
to increase capacity, provides valuable contributions to the operator’s business case. Table 2Table 3
outlines some of the key features of BLiNQ’s solution and summarizes their impact on the operator’s
business case.
Table 3 BLiNQ Solution Features and Contribution to Operator's Business Case.
Feature Description Impact on Business Case
Interference Maps interference between backhaul Reduce operational expenditure by
Detection clusters and provides RF and field shortening the design cycle and providing
operation engineers with valuable tools for troubleshooting the network.
tools for speedy deployment and
network planning.
Interference Eliminates co-channel interference Reduce capital expenditure requirements
Mitigation between interfering links in different for spectrum acquisition.
backhaul clusters.
OFDMA/NLOS OFDMA physical layer provides a 1- Reduce opex by allowing deployment
NLOS Wireless Backhaul for Small Cell Base Stations: 5
Total Cost of Ownership Comparison with Optical Fiber

6. high-speed robust link in NLOS in hard to reach areas, particularly
conditions by using narrow-band where fiber is not available.
carriers to span a wide-bandwidth 2- Shorten ‘time to air’ for new cell sites
frequency channel. and provide faster revenue generation.
Spatial Doubles the link capacity over single- Reduce capex by doubling the spectral
Multiplexing / antenna systems and increases the efficiency: requires half the spectrum to
MIMO robustness of the communication backhaul the same amount of data
channel. without MIMO.
SON Allows the backhaul network to Reduce opex requirements related to
reconfigure itself as the network of initial deployment, on-going maintenance
compact base stations grows. and troubleshooting.
Point-to- Backhaul multiple compact base Reduce capex and opex by reducing the
Multipoint stations to one central location. number of hub sites to backhaul data into
the core network.
Sub 6 GHz Operates in TDD mode in bands such Reduce capital expenditure for spectrum
Licensed as 2.3 GHz, 2.5 GHz and 3.3-3.8 GHz. acquisition.
Spectrum
Small Form Low-weight ( 3.5 kg), small footprint Reduce operational expenditure
Factor (20x30 cm) allows for a one-person associated with installation, deployment
install within 30 minutes on light and maintenance.
poles and other small structures.
Cost of Spectrum
As stated, BLiNQ solutions operate in sub-6 GHz licensed bands which have several technical advantages
which include:
1- Robust propagation channel that is not affected by environmental factors such as rain and fog,
and less affected by physical obstacles such as buildings and trees.
2- Controlled interference environment given that all transmitters belong to the same wireless
operator allowing frequency planning.
Most importantly, in the last few years, several sub 6-GHz bands have become available for use by fixed
access networks, primarily WiMAX. As such, there is an abundance of such bands available in areas
where fixed access networks did not gain traction: dense urban cores of developed markets where
today’s 3G services are most utilized.
On a worldwide basis, spectrum in the 2.3, 2.5 and 3.3-3.8 GHz bands have fetched very low valuations
in recent years, especially when compared with prime access spectrum which is characteristically FDD in
sub 2.1 GHz bands (700 MHz, 800/900 MHz, 1700 MHz, 1800/1900 MHz and 2.1 GHz). Table 4 samples
the results of recent spectrum auctions and shows that prime spectrum bands for backhaul in 2.6 and
3.x GHz are typically priced at around $0.01-$0.03 per MHz-PoP, sharply lower than prime paired
spectrum for access bands which typically fetch over $0.5 per MHz-PoP, or over 25 times the price.
Table 4 lists some specific licenses and their corresponding prices.
NLOS Wireless Backhaul for Small Cell Base Stations: 6
Total Cost of Ownership Comparison with Optical Fiber

7. Table 4 Results of Recent Spectrum Auctions.
Country Year Band (MHz) Type Average Cost Comment
(per MHz-PoP)
Germany 2010 2500 – 2700 Paired €0.023 Access band
Germany 2010 2600 Unpaired €0.021 Prime backhaul band
Germany 2010 800 Paired €0.73 Prime access band
Germany 2008 3500 Paired €0.005 Prime backhaul band
Italy 2008 3500 Paired €0.019 Prime backhaul band
USA 2008 700 Paired $0.7 Prime access band
USA 2006 1700 Paired $0.54 Prime access band
India 2010 2300 Unpaired $0.17 Access or Backhaul
India 2010 1900 Paired $0.39 Prime access band
Greece 3500 Paired €0.043 Prime backhaul band
Poland 3700 Paired €0.003 Prime backhaul band
Table 5 List of Selected Frequency Licenses.
Country Operator Frequency Band Channel Size Price
Germany Vodafone 2.6 GHz 2x5 MHz € 18,948,000
Germany Vodafone 2.6 GHz 1x5 MHz € 9,051,000
Germany Clearwire 3.5 GHz 2x21 MHz € 20,000,000
USA Verizon 700 MHz 2x11 MHz $4,741,807,000
UK UK Broadband 3.5 GHz 2x20 MHz £7,000,000
Netherlands WorldMax 3.5 GHz 20 MHz € 4,000,000
Austria WiMAX Telecom 3.5 GHz 2x28 MHz € 40,700,000
Greece Cosmotel 3.5 GHz 2x14 MHz € 20,475,000
Poland Clearwire 3.6 GHz 2x14 MHZ PLN 1,400,000
Canada Several 3.5 GHz 2x25 MHz $11,240,615
The cost of spectrum is an important factor in calculating the total cost of ownership. National or
regional licenses can be obtained, depending on national regulations. Therefore, it is possible to
purchase a license for regions with major cities (where mobile backhaul is desired) while foregoing
licenses in regions where population is less dense (where fixed access networks can be more valuable
for lack of Internet connectivity alternatives).
Based on the prices above, licenses for 10 MHz of spectrum can cost as low as a few hundred thousand
dollars or as high as twenty million dollars for a nation-wide license in a developed market. These
licenses are typically issued for twenty years.
The cost of spectrum must be included in the TCO calculations for a valid comparison with fiber
backhaul. The cost of spectrum must then be spread over all the backhaul units deployed in a market. To
simplify the calculations, we focus on determining the number of wireless backhaul nodes that lead to
breakeven in total cost of ownership with fiber backhaul.
NLOS Wireless Backhaul for Small Cell Base Stations: 7
Total Cost of Ownership Comparison with Optical Fiber

8. Comparative Analysis to Fiber Backhaul
We focus our analysis on comparing two fundamental cases:
1- Deployment of compact base stations with fiber backhaul (base case).
2- Deployment of compact base stations with NLOS wireless backhaul solution.
For the purpose of this analysis, fiber is assumed to be available close to the desired site location, hence,
only a nominal setup fee will be incurred by the wireless operator. The majority of expenses are
operational expenses related to leasing the fiber cable as shown in Table 6.
Table 6 Cost of Operating a Fiber Backhaul Connection.
Setup Fee $1,500 One-time fee to setup a fiber connection.
Average cost of leasing fiber for 10 Mbps capacity in urban
Monthly Expense $1,000
area.
The assumptions for NLOS solution are outlined in Table 7.
Table 7 Capital and Operational Expenditure Assumptions for NLOS Product.
Capital Expenditure
Backhaul $1,800 Includes backhaul module, antennas, cables and other ancillary
Module elements.
Installation $350 Used for Hub or Remote Backhaul Module installation. Accounts
for field services to prepare and install the unit on a pole.
RF Engineering $150 Per link charge for RF engineering design services to ensure
proper deployment and configuration of NLOS wireless link.
Implementation $250 Per link charge used to cover project management and other
Services services related to implementing and deploying the product.
Operational Expenditure
Pole Lease $30 Monthly charge to lease space on a pole to mount the NLOS
Hub and Remote Backhaul Modules.
Support 15% Annual percentage of solution price. Covers product software
Software updates support.
Field Operations $50 Annual charge per node to cover expense of field operations
personnel. This is a marginal cost as Field Operations are also
required for compact base stations.
Flat Rate Power $7 Monthly cost incurred to provide electrical power to the
backhaul node.
Backhaul Costs $1,500 Monthly cost to provide fiber backhaul service at the hub site.
Assumes hub sites are selected where fiber is already available.
For all financial calculations, we assumed a 2% inflation rate and a 12% weighted average cost of capital
(WACC).
The cost of operating fiber backhaul to a single compact base station site is shown in Table 8 based on
the assumptions presented in Table 6.
NLOS Wireless Backhaul for Small Cell Base Stations: 8
Total Cost of Ownership Comparison with Optical Fiber

9. Table 8 Example of Total Cost of Ownership for Fiber Backhaul.
Year 1 Year 2 Year 3 Year 4 Year 5 Total
Net Present Value 13,500 10,929 9,953 9,064 8,255 51,700
Figure 2 shows the number of nodes (compact base stations) where the NLOS wireless backhaul solution
is deployed to achieve total cost of ownership breakeven with fiber backhaul. For instance, given 4:1
PMP ratio (four compact base stations backhauled to one NLOS hub module) and $20 million cost of
spectrum license (20 years), it requires 172 compact base stations to achieve breakeven in the total cost
of ownership.
As expected, the number of breakeven nodes increases with lower PMP ratio. So, for the same
parameters, it requires 472 nodes to achieve breakeven with fiber, while it requires only 144 nodes for
breakeven in 6:1 configuration.
Figure 2 Number of Nodes to Achieve Breakeven in the 5-year TCO with Fiber Backhaul.
Table 9 shows the 5-year total cost of ownership for the NLOS and the fiber backhaul option for
different number of nodes assuming $20m cost of a spectrum license (over 20-year period).
Table 9 Five-Year Total Cost of Ownership Comparison.
Number 5 Year TCO ($m) NLOS Wireless Backhaul vs. Fiber
of Nodes 2:1 3:1 4:1 6:1 Fiber 2:1 3:1 4:1 6:1
100 9.11 7.91 7.31 6.71 5.17 -76% -53% -41% -30%
200 13.23 10.83 9.63 8.43 10.34 -28% -5% 7% 19%
300 17.34 13.74 11.94 10.14 15.51 -12% 11% 23% 35%
400 21.45 16.65 14.25 11.85 20.68 -4% 19% 31% 43%
500 25.57 19.57 16.57 13.57 25.85 1% 24% 36% 48%
600 29.68 22.48 18.88 15.28 31.02 4% 28% 39% 51%
700 33.79 25.39 21.19 16.99 36.19 7% 30% 41% 53%
NLOS Wireless Backhaul for Small Cell Base Stations: 9
Total Cost of Ownership Comparison with Optical Fiber

10. 800 37.91 28.31 23.51 18.71 41.36 8% 32% 43% 55%
900 42.02 31.22 25.82 20.42 46.53 10% 33% 45% 56%
1000 46.13 34.13 28.13 22.13 51.70 11% 34% 46% 57%
1100 50.25 37.05 30.45 23.84 56.87 12% 35% 46% 58%
1200 54.36 39.96 32.76 25.56 62.04 12% 36% 47% 59%
1300 58.47 42.87 35.07 27.27 67.21 13% 36% 48% 59%
1400 62.59 45.79 37.38 28.98 72.38 14% 37% 48% 60%
1500 66.70 48.70 39.70 30.70 77.55 14% 37% 49% 60%
The cost allocation for the total cost of ownership is shown in Figure 3. The main expense related to the
NLOS solution is the cost of spectrum. The second leading expense is the cost of backhauling traffic from
the NLOS hub modules to the core network. In this comparative analysis, we conservatively assumed
that fiber would have to be leased. However, this cost can be reduced substantially if fiber is already
available at the hub site. For example, co-locating a hub site with an existing macro base station where
backhaul is already available can result in significant reduction in the total cost of ownership.
Alternatively, using LOS microwave backhaul may result in cost reduction over fiber in many instances.
Figure 3 Cost Allocation for BLiNQ Backhaul Solution at Breakeven with Fiber Backhaul.
NLOS wireless backhaul solutions offer a competitive business case in comparison to fiber backhaul due
to several considerations:
1- Use of low-priced spectrum assets for use in backhaul application results in a low breakeven
number of nodes versus fiber backhaul.
2- High-capacity links allow backhaul of multiple base stations to a single hub. This provides two
advantages:
a. Lower capital expenditure and simpler network design, implementation and
deployment effort.
NLOS Wireless Backhaul for Small Cell Base Stations: 10
Total Cost of Ownership Comparison with Optical Fiber

11. b. High flexibility in placing hub modules in locations where fiber or LOS microwave
backhaul is readily available to backhaul the aggregate traffic of multiple base stations
to the core.
3- Quick and simple deployment and activation of compact base stations to address coverage holes
and capacity hotspots leads to higher revenue generation and greater customer satisfaction.
This upside measure was not factored into the business case.
4- Implementation of frequency detection mitigation techniques allow high spectrum utilization
which leads to lower upfront capital expenditure to secure what is relatively low priced
spectrum.
Conclusion
Compact base stations are a key element in the design of mobile data networks. Due to the high
capacity of these base stations and since they are deployed below clutter, traditional wireless (LOS
microwave) and wireline (e.g. leased line) backhaul techniques are no longer an option, leaving fiber as
the only feasible method of backhaul. BLiNQ’s intelligent non-line-of-sight wireless systems provide an
economically competitive solution to fiber backhaul: a relatively low number of wireless backhaul nodes
are required to achieve cost breakeven with fiber backhaul (in the low hundreds). The savings in total
cost of ownership can be significant, exceeding 30% for typical deployment scenarios. The financial
model demonstrates that some of the main costs associated with backhaul include spectrum cost and
the cost of backhaul to the core network. For this reason, BLiNQ solutions implement interference
detection and mitigation techniques that minimize the amount of spectrum required for the backhaul
network and make use of low-cost spectrum in sub-6 GHz band which has been deemed less desirable
for access applications. Furthermore, BLiNQ products provide high-capacity point-to-multipoint links to
maximize the aggregated data at the backhaul hub site and reduce the cost of transport to the core
network.
NLOS Wireless Backhaul for Small Cell Base Stations: 11
Total Cost of Ownership Comparison with Optical Fiber

12. Acronyms
CBTS Compact Base Transceiver Station
FDD Frequency Domain Duplex
HSPA High Speed Packet Access
LOS Line of Sight
LTE Long Term Evolution
MARA Managed Adaptive Resource Allocation
MIMO Multiple Input Multiple Output
MNO Mobile network operators
NLOS Non Line of Sight
OFDMA Orthogonal Frequency Division Multiple Access
PMP Point to Multipoint
PoP Population
TCO Total Cost of Ownership
TDD Time Domain Duplex
TDM Time Domain Multiplex
UMTS Universal Mobile Telecommunication Systems
WACC Weight Average Cost of Capital
BLiNQ Networks Inc.
400 March Road, Suite 240
Ottawa, ON K2K 3H4 Canada
Main: 613-599-3388
info@blinqnetworks.com
www.blinqnetworks.com
BLiNQ Networks was founded in June 2010 after the acquisition of intellectual property and wireless assets from
Nortel Networks. BLiNQ is a pioneer of wireless backhaul solutions that fundamentally change the way mobile
operators deliver mobile broadband services in urban areas. BLiNQ uses cost-effective sub-6 GHz spectrum and
unique and patent-pending Managed Adaptive Resource Allocation (MARA) technology to provide network-level
intelligence, self-organizing network capabilities, and eliminate interference challenges to maximize spectral
efficiency. BLiNQ is headquartered in Plano, TX with research and development facilities in Ottawa, Canada. For
more information, please visit www.blinqnetworks.com.
The information presented herein is to the best of our knowledge true and accurate and is subject to change without notice. No
warranty or guarantee expressed or implied is made regarding the performance or suitability of any product. All product or
service names are the property of their respective owners. © BLiNQ Networks Inc. 2010. All Rights Reserved.
NLOS Wireless Backhaul for Small Cell Base Stations: 12
Total Cost of Ownership Comparison with Optical Fiber