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�ith voice revenues on the slide, data
services have long been viewed as
the operators’ APRU saviour. Last
year finally saw data overtake voice in terms
of network load and with many operators
now touting the benefits of affordable mobile
broadband there is every chance that data
volumes will soon dwarf traffic generated by
voice. Crucially though, revenues generated
from data services show no signs of spiralling
upwards.
Adding greatly improved capacity for marginally
better returns is not an investment
that will appeal to carriers. For years now
the industry has been making huge investments
improving speeds in the air interface
and subsidising the rolling out of compatible,
higher end handsets in order to improve the
quality and range of data offerings available
to the consumer. Backhaul solutions have
steadily improved over time, but there have
not been any major breakthroughs in technology
or capacity.
Backhaul vendors are claiming—more
vocally than ever—that a surge in data
service uptake as a result of next generation
network roll outs and a greater penetration
of 3G phones in the subscriber base, and
no doubt the relatively recent widespread
introduction of all you can eat data tariffs,
will produce an undesirable bottleneck in
the backhaul.
“There have been some tremendous changes
in the last 24 months,” says Shahar Gorodeisky,
CTO of backhaul specialist Celtro. “Mobile
backhaul was a small niche market, everyone
was focused on the radio technology and radio
network, being able to supply more capacity
over the radio interface, so backhaul was just
a transport access solution and there was no
capacity or service limitation whatsoever. This
all changed after the transition to 3G when air
capacity to the end user jumped up.”
“The backhaul issue is one of the top five
issues that operators are talking about right
now, and they need to sort it out,” warns
Jeanette Fridberg, head of product marketing
for radio networks at Swedish infrastructure
vendor Ericsson. “One of the challenges is
that there is no standardised way of doing
things. There are next generation networks
being built on top of legacy transport links,”
she warns.
“The question that is central to this is, how
quickly will mobile broadband be taken up
and how dramatic will be the increase of
traffic on the backhaul network?” says John
BACKHAUL FEATURE
Lively, VP network infrastructure, at industry
analyst Ovum. “If it is incremental, then there
are plenty of solutions that [the operators]
can use without doing a full swap out on the
network. If it is going to be like two orders of
magnitude over night, flood then it is going to
be problematic for them in the near term.”
Jeremy Steventon-Barnes, director of
strategic solutions at backhaul kit provider
Tellabs echoes these views: “If you keep
building backhaul in the traditional way, then
the business case is not going to work for
mobile broadband. When you build backhaul
for voice, you’re adding fixed units of capacity,
for fixed units of demand. So effectively
for every busy hour of voice traffic, I’ve got
incremental revenue of a fixed amount and
that makes me a happy operator. The cost
grows in slightly lumpier ways than the
revenue, but the two track each other in a
fairly linear way. The problem with mobile
broadband is the nature of the traffic is much
more bursty.”
One operator that has enjoyed an impressive
adoption of its mobile broadband service
is Singapore’s MobileOne (M1). The carrier
introduced its mobile broadband service
late in 2006 and, according to the firm’s CEO
Neil Montefiore, it has enjoyed a 200-fold
growth. As part of its backhaul solution
in the past, the firm had, in the main, been
leasing lines from local incumbent SingTel.
However, it soon became apparent that rolling
out its own fibre network would be more
cost effective.
According to Montefiore the capex cost of
rolling out its own fibre network is around
S$100m, while the leased circuits—even with
discounts—were S$40m per year. “It was a bit
of a no brainer,” Montefiore told MCI.
Singapore, being a relatively small urban
city-state is, of course, a bit of a special
case. However, Australia’s Telstra employed
a similar self-build strategy to accompany
its nationwide HSPA roll out. So, do two
carriers digging their own trenches for fibre
constitute a ‘trend’? Montefiore certainly
thinks so: “The traditional incumbents,
which are still present in most countries,
providing backbone networks are not really
prepared to price it to make it attractive
to network, so I think the operators will
just self-provide. Because data rates are
growing so rapidly there is very little else
they can do about it.” Ericsson’s Fridberg
agrees: “Leased line is the most expensive,
but if you have your own E1s and T1s the ››
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