Backhaul is crucial in that it provides the connection between the core network and the mobile base stations that connect to users' devices. Any cellular network is only as good as its backhaul since it does not matter how well the cellular base stations perform or how wide a choice of handsets the customer has: if the backhaul capacity isn't available the user suffers. Lance Hiley of Cambridge Broadband Networks explained to Michael Schwartz.
In times gone by backhaul wasn't such an issue. A standard leased line (typically delivering around 2Mb/s) would be sufficient for a number of concurrent voice calls and downloading or sending a limited amount of data. As such, with 2G networks transmission costs accounted for as little as 10-20% of operational expenditures. However, the situation with 3G networks - and even more so with their evolution to HSPA and LTE - is substantially different due to the data-hungry services these networks offer and the growth of mobile broadband. This migration means that operating expenses, driven by backhaul costs, rise to 30-40%, with global expenditures predicted by Infonetics to hit US$23 billion by 2013.
These backhaul costs exacerbate the already high cost of carrying data. This, potentially, could create a huge drain on operator budgets globally and make it challenging for service providers to realise significant profits from data services as demand increases with new services and devices such as mobile-broadband enabled laptops. Adding to the pressure is the fact that operators in developing markets such as Africa have limited room for manoeuvre when it comes to costs relative to their counterparts in "the west", and carriers in these regions simply cannot afford to overspend on the provision of backhaul. If operators are to roll out this next generation of data services and importantly, realise profits, both opex and capex need to be reduced - doing "more of the same" is no longer an option.
Cellular operators need to take a different and holistic view of their network evolution needs: not just in terms of access networks, but rolling out infrastructure designed to backhaul the cellular traffic itself. They also need to think in terms of the potential to save costs by designing a common backhaul network that supports current standards like 2G and 3G and is also equipped to handle 4G standards such as LTE and WiMAX, simplifying the network infrastructure and ensuring, unlike legacy networks, it is designed to shift the large volumes of traffic needed.
A change in microwave backhaul
While all these developments have the potential of a gold-rush opportunity, Cambridge Broadband Networks (CBN) believes that the industry needs a major change in approach to backhaul performance to realise it. Clearly doing more of the same is not enough if operators are already scrambling to upgrade and roll out their networks and increase their capacity, and CBN argues that carriers in such a situation need a solution that makes the most of existing resources, both monetary and spectrum.
The new approach
Point-to-multipoint (PMP) uses a different architecture from traditional fixed or microwave backhaul methods to deliver complete flexibility. PMP backhaul architectures bring a number of cell site links back to a single aggregation point or hub. This immediately reduces the number of radios and antennae making the network more efficient, less expensive to build, and less energy-hungry. Indeed, because the spectrum for the system is licensed across a number of radios, the resource is in effect shared, making the utilisation of the spectrum more efficient. PMP systems also lend themselves to a more IP-like approach to packet data management.
CBN believes its VectaStar product, based on PMP principles, has low latency and high spectral efficiency and that it costs less than 50% of traditional microwave solutions, enabling carriers to achieve fibre-like connectivity speeds while owning and controlling their own backhaul network (rather than outsourcing it as is common in some areas of the developed world). This has meant some operators are able to operate their backhaul infrastructure with half the operating expenditure of those counterparts using more traditional options.
These characteristics are vital in emerging markets where as the markets become more competitive operators have limited room to manoeuvre on voice pricing. The challenge for operators is to build their networks quickly and cost-effectively so they can introduce additional features based on data and improve coverage range and service quality. Point-to-multipoint aids the process by supporting voice and data on a single platform and dramatically reducing the time it takes to build the network - up to 50% less than a comparable point-to-point architecture.
At a time when networks are growing at record levels, systems must be extremely fast to deploy. Once a cell site location is chosen, with microwave, backhaul can be set up at the same time as site installation with no additional spectrum planning or licensing and enabling a faster RoI for operators.
CBN in the developing markets
It is useful to note where CBN is in terms of market deployments. Globally, there are 47 customers with VectaStar, located across 33 different countries. The first of these was established in 2002 and they have been growing steadily since.
This year in Africa - and African markets grow fast and are big - mobile connections are out-stripping landline connections by a factor of eight, and the mobile subscriber base has grown to 282 million, an increase of 30% in the 12 months to May 2008. Furthermore, mobile broadband services in the region are on target to outstrip the fixed line alternatives. According to AfricaNext Investment Research, mobile broadband will account for more than half of the continent's broadband subscriber base by 2012, more than a four-fold increase.
By way of example, a review of MTN subscriber growth alone in Africa in the 18 months until the end of 2007 shows uninterrupted growth in each of MTN's 16 African markets, ranging from 235,000 subscribers in Guinea-Bissau and 262,000 in Zambia right up to 14.8 million in Nigeria and 16.5 million in South Africa.
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