It's been understood for some time that mobile operators need to upgrade their base station backhaul links in order to cope with the growing traffic demands of 3.5G data services being driven by dongles and smartphones. That's no less true today as more smartphones hit the market and devices like the iPad promise to kick mobile IP traffic growth rates into high gear.
Which is saying something, considering the current statistics. In Hong Kong alone - where cellcos are already offering HSPA+ connectivity - the average 3.5G consumer is generating 150MB a month, compared to 11MB in 2007, according to Frost & Sullivan. In the US, where the iPhone and Android are fighting for domination, it's around 275MB a month. And that's only going to increase as smartphones become cheaper and more popular, HSPA chipsets are embedded into laptops and consumer electronics, and LTE starts going live.
That's why industry analysts are projecting a serious increase in backhaul capex spending over the next four years. In-Stat expects total expenditures for mobile backhaul - including line leasing, new equipment and spectrum acquisitions - will reach almost $117 billion by 2014, a 41% increase over the $83 billion spent on backhaul in 2009.
However, cellcos in Asia planning their next-gen backhaul need to take numerous factors into account, and not just the inevitable future migration to LTE. Other significant factors include support for legacy TDM services and the possibility of offering wholesale backhaul services to competitors.
Certainly LTE itself is a backhaul design challenge in itself, as the network morphs to a flatter IP/Ethernet architecture and core functions become more decentralized and move to the network edge, with latency for real-time services like VoIP and video an increasingly important metric.
One key challenge that LTE will bring is the sheer number of cell sites that will be required, says Ashley Halford, regional solutions sales manager with Tellabs Asia Pacific.
"LTE cells will be smaller, which is going to have a significant impact on the way operators plan their mobile backhaul networks," he says. "Clearly, with the proliferation of small cell sites, this is going to involve a greater level of distribution of the mobile backhaul network and increase the level of diversity in the connection types, including DSL, microwave and wireless."
That also means mobile backhaul will have to be flexible enough to handle that level of diversity, he adds. "What's chosen today need to be malleable and flexible to support the increasing the number of cell sites that the operators will be deploying."
While it's tempting to focus on the sexy numbers regarding the exponential growth in mobile data traffic, there are other growth areas that operators should keep in mind when upgrading the backhaul segment - such as the local state of fixed broadband, says Marc Einstein, Asia Pacific industry manager for ICT Practice at Frost & Sullivan.
"In emerging markets [in Asia], we still see 10% or less fixed-broadband penetration across the board," Einstein says. "One of the main implications from this perspective is that the vast majority of broadband growth in emerging Asian economies is going to be wireless, which certainly has very, very major implications for the backhaul space."
Another factor, he adds, is the continuing growth of SIM card users in the region. "In many markets like Vietnam and Bangladesh, we are seeing that the number of SIM card users is growing maybe two times or more compared to the revenue growth. Also, China and India only have SIM card penetration rates of 60% and 50% respectively at the beginning of the year."
The message, he says, is that circuit-switched 2G is not only going to remain a legacy service for many operators, but a service that is still likely to grow, not shrink.
"Even though we have a penetration rate of 100% in Thailand or 80% in Indonesia, we are still going to see a significant amount of growth in the 2G voice space," he says, adding that this will vary from market to market.
"In Japan, SoftBank has already shut off their 2G network completely. In the next two to three years you may see that happening in countries like South Korea, Taiwan, maybe even Hong Kong, Singapore, Australia," Einstein says. "But there will be a considerable demand for 2G services particularly in India, China and Southeast Asia for the next five years, so 2G does have a ways to go. And this has implications for the backhaul market."
The chief implication is the ability to continue supporting legacy TDM infrastructure even as the operator evolves the backhaul towards an all-IP architecture. That raises specific considerations operators must bear in mind, says Halford of Tellabs.
"Probably the most important of these is the fact that a lot of the resiliency protection that these networks traditionally provided suddenly disappeared," Halford says. "They need to be carefully designed into the mobile backhaul network environment. So this requires more careful thinking and planning when doing that migration."
Other related key considerations, he adds, include synchronization (something traditionally provided by TDM networks) as T1/E1s are disconnected, and the introduction of VoIP service, "which means quality of service planning and management of services across the network will become very important."
Interestingly, another market-specific aspect for operators to consider in their backhaul plan is the level of mobile competition, says Einstein of F&S.
"We are seeing a tremendous amount of competition in some markets in Asia much more than in any region in the world. Indonesia has 11, Cambodia has nine, and Vietnam has seven, to name a few examples," he explains. "But in these kinds of markets we typically see maybe one, two, in some cases three operators with a fixed network and a mobile network. The vast majority of these players are purely wireless players.
"That creates wholesale opportunities for backhaul players, because there are just so many mobile operators in Asia that don't have their own backhaul but just recently got a 3G license," he says. "Building out their own backhaul would just be cost prohibitive. This is a trend that we are going to increase as we see more 2G operators in the emerging markets become 3G operators."
Halford of Tellabs agrees. "This is an increasing trend that we see among operators where wholesaling of mobile backhaul networks or outsourcing of these networks becomes a direct cost-effective solution for operators," he says.
But as operators upgrade their mobile backhaul infrastructure, they need to make sure it's designed to offer managed network elements like SLAs and QoS assurances, Halford says.
"Mobile operators who might be using wholesale backhaul networks often need to set up their own management capabilities on that network and manage right down to the cell site," he says. "Mobile backhaul networks need to be carefully designed for wholesale, because it increases the level of complexity and the number of factors that have to be included in the network."
Excerpted from the Telecomasia.net webinar "Bracing backhaul for the 4G future". Watch the full webinar at http://www.telecomasia.net/content/webinar-bracing-backhaul-4g-future