Significant growth in mobility, server virtualization and cloud computing applications are creating fresh demands on the mobile network, causing more investment in networking architectures including mobile backhaul.
Ryan Perera, country head of Ciena India, said the focus on 4G / LTE networks is causing a major shift in the architecture of mobile networks and will have a significant impact on the development of new data intensive applications like the connected car.
Customers today are demanding speed and simplicity in adding backhaul capacity that provides the necessary flexibility to handle multiple outside plant environments. As apps continue to create more data that must be managed and transported, customers need an intelligent network that is agile enough to respond to traffic demands, utilizing network resources in a way that maximizes outputs.
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“Since the introduction of the iPhone back in 2007 and subsequent proliferation of smart phones generating mobile data as well as voice traffic, service providers have prioritized building out and improving both their wireless and wireline networks,” said Tam Dell’Oro, president and founder of Dell’Oro Group.
Dell’Oro Group earlier predicted that though carriers will enhance their wireless networks, they will put more emphasis on backhauling traffic. This indicates that they will be improving their wireline networks in the next five years.
5 tips for telecom CTOs
Select a vendor that can provide:
# a full end to end solution for mobile backhaul including small cell, access and aggregation layers,
# solutions that can scale to 1G to the small cell, 10G to macro cell and 100G hand-offs to the core,
# a solution that is simple to turn-up that don’t need high level of expertise,
# solutions that are agile, have ability to enable bandwidth on demand services for real-time events,
# a vendor that can help you monetize your network for additional services beyond mobile backhaul.
Challenges in mobile backhaul
The growth of OTT apps on smartphones such as Netflix, streaming music like Spotify and social media like Facebook on mobile is driving bandwidth per subscriber significantly.
LTE-A (Advanced) increases the number of subscriptions per cell site as well as bandwidth per subscriber.
“Spectrum is finite so only way to increase density of users is to add more cells; operators cannot add more macrocells as this would cause interference. Small cells have smaller coverage areas, so avoids this problem. Small cells are also compact enough to be mounted on a lamppost in dense urban areas or deployed in a rural area where a macrocell would be too expensive,” says Ciena India’s Perera.
Richard Webb, directing analyst for mobile backhaul and small cells at Infonetics Research, said: “Our recent macrocell backhaul study reveals the extent to which operators are looking at software-defined networking (SDN) and network functions virtualization (NFV) solutions to provide backhaul flexibility and cost-savings.”
How’s the market progressing?
In North America smartphone penetration has now reached 60 percent, driving a change in mobile network architectures as end-users are using data intensive apps more so then ever. End-users in North America also have expectations when it comes to broadband speeds, causing operators to invest in upgrading their networks.
Alam Tamboli, senior analyst at Dell’Oro Group, said: “In the United States, demand for routers in the backhaul for LTE networks has been one of the primary motives for investment in recent years, however this quarter service providers in the region also invested heavily into fixed networks. In much of the world, routers used for LTE mobile backhaul networks continued to drive investment in the edge.”
Wireless and wireline telecom markets will grow at a CAGR of 1 percent and 3 percent, respectively between 2013 and 2018. Microwave, optical, SP routers, and wireless packet core will be driving the majority of the growth in the forecast period, according to a telecom analysis report by Dell’Oro Group.
Telecom network vendor Alcatel-Lucent recently announced that it is extending its wireless mobile backhaul capabilities to allow operators to quickly deploy high-capacity ultra-broadband coverage via LTE heterogeneous networks (hetnets) – a mix of macro and small cell base stations.
The company said a new full outdoor microwave packet radio (MPR) networking unit helps to save power and cost as operators deliver LTE access to customers everywhere. Alcatel-Lucent is also enhancing its small cell backhaul radio portfolio to more efficiently deliver wireless backhaul across a range of deployment scenarios.
Microwave equipment market
Microwave comprisea 48 percent of mobile backhaul equipment spending in 2014 and trend downward slightly by 2018, in favor of wired solutions, predominantly fiber-based, analysts say.
The investment in HSPA / HSPA+ and growing LTE deployments are fueling Ethernet macrocell backhaul spending, especially microwave and Ethernet over fiber. Backhaul continues to dominate the microwave market, while access and transport remain stable niche segments
The EMEA region (Europe, the Middle East, and Africa) leads the world in microwave equipment revenue, followed by Asia Pacific.
Infonetics forecasts ARPU for Ethernet-only units, which account for an increasing proportion of shipments, to decline to around half its 2013 value by 2018.
Even with the arrival of 5G towards 2018, the microwave backhaul market may be arriving at the limit of demand for increasing backhaul capacity from the cell site, as many will be more than adequately future-proofed by this point.
The global telecom industry will be spending a cumulative $45 billion on macrocell mobile backhaul equipment over the 5 years from 2014 to 2018, said Infonetics Research.
In India, the growth in mobile penetration, as well as the imminent deployment of 4G/ LTE services nation-wide is creating significant demand for modernized mobile backhaul.
Image source: CommScope
Baburajan K
editor@telecomlead.com