Matt Walker, Senior Analyst
IIR’s recent Transport Networks for Mobile Operators conference highlighted the nuisance that wireless backhaul is becoming for mobile operators. Several Asian operators and even more suppliers agreed on one thing: as bandwidth speeds on cellular networks increase and packet-based mobile services attract more users, traffic growth is making traditional backhaul network designs unmanageable. Even the most advanced service providers are taking evolutionary approaches to dealing with the problem, however.
On October 8-11, IIR – an events company affiliated with Ovum through joint ownership by Informa – held its first Transport Networks for Mobile Operators (TNMO) conference in Asia, in Hong Kong. This follows a more broadly-themed Asian event held in Singapore last January, Transport Network Strategies (TNS). Speakers at the TNS event discussed network evolution from the edge to the core, and addressed a broader range of network evolution issues such as IMS, SIP, and VoIP. At TNMO, the focus was more narrowly targeted, examining how operators can best scale and evolve their mobile backhaul networks in Asia-Pacific.
INOs and alternates, even in mature markets, all struggle with opex
While TNMO had far more speakers representing vendors than operators, two operators in particular provided useful insights: (1) PCCW, the incumbent network operator (INO) in Hong Kong, which offers voice, broadband, TV, and mobile services, and (2) StarHub, Singapore’s second-largest carrier, which operates fixed/broadband, mobile, and cable TV services. Both operators’ home markets are among the wealthiest, densest, most competitive, and most demanding (in terms of service requirements) in the world. Despite their different backgrounds – one an incumbent, one an alternate – they have similar challenges and approaches.
PCCW believes it has been successful in addressing 3G’s three challenges:
- Quickly providing comprehensive coverage: a site-sharing strategy with its 2G network helped
- Attracting customers: a quadruple-play offering leveraging PCCW’s other assets has worked fairly well; and
- Raising demand for multimedia services: mobile TV, high-definition live streams of football matches, a mobile music platform, push e-mail, and a “Netvigator Everywhere” service have proved enticing. The latter service, which just launched in 3Q07, is based on a PC card that auto-selects the best Internet access method – WiFi, HSDPA, or simple 3G – depending on location.
Now, though, PCCW is trying to deal with the drawbacks of this success: it has experienced rapid traffic increases on the backhaul portion of its radio access networks. What complicates this is that traffic growth is becoming harder to predict, both in aggregate volumes and peaks, and in location-specific patterns. For example, football broadcasts can create traffic spikes in cells that otherwise wouldn’t have them. Moving to HSDPA can cause the average base station-RNC connection to require as many as 10+ E1 (equivalent) connections, whereas the 2G world required just one.
PCCW’s answer is to build a flexible bandwidth platform. This must be efficient internally while allowing PCCW to continue operating profitably as the largest provider of RAN backhaul leased lines in Hong Kong. Hence, it will move its entire network to a metro Ethernet-based platform. This change will be done in increments. The interim step will be to put all data and high-QoS TDM traffic onto IP in the backhaul but leave voice on the E1s.
As it moves to IP, opex reduction is a significant motivator, even though PCCW is the incumbent. The mere fact that capacity expansion for any given backhaul link can be done remotely is a huge boon. Otherwise, PCCW engineers need to spend a lot of time arranging for and conducting site visits, which is not always easy when you have to deal with hundreds of different landlords/site owners.
StarHub operates well over 1,000 base stations in Singapore, and opex reduction is also a key reason behind its desire to adopt IP-based backhaul over its own physical media (whether leased or owned fiber/copper cable, point-to-point microwave, or WiMax). It believes that a migration towards IP, during which TDM voice will remain on E1s and the more packet-intensive services (or cells/districts) will go over Ethernet first, will ultimately cut its transmission rental costs by 40-80%. Microwave and, when fiber is available, native Ethernet will be the most common media. StarHub is also testing WiMax for backhaul, but does not yet view the WiMax backhaul approach as mature.
The two things pushing Ethernet-based backhaul are that StarHub’s fixed-line enterprise customers are demanding Ethernet services and that the CFO has a goal of keeping network opex flat even as the network (and its traffic, services, and revenues supported) continues to grow. Already, roughly 50% of StarHub’s Node Bs run on Ethernet alone, without any E1 interfaces at all. Huawei provides the UMTS/HSPA and Ethernet switching equipment.
Ethernet’s on the ascent, but E1s won’t go away without a fight
Presentations at the TNMO event highlighted the complexity of the backhaul issue. Carrier Ethernet-based products and architectures, network/site sharing, fiber network expansion, WiMax, and other techniques for backhaul cost optimization were explored. Ethernet in particular has been the subject of much vendor hype, and it is likely part of the most suitable long-term solution.
However, big obstacles remain, such as unsettled standards, synchronization, the need to exploit the installed base, the need to train field personnel with new boxes and test equipment, interoperability, and others. One revealing comment came from PCCW: “We’ll still be using E1s for a long time to come…. Starting in 2009 IP-based backhaul may carry more of the traffic, but [revenues are another story].”
Cambridge Broadband, a vendor presenter at TNMO, also pointed out the power of the installed base, saying that “it is possible that the E1 requirement [in mobile backhaul networks] may never entirely disappear.”
Indeed, this is consistent with Ovum RHK’s optical networks research findings. While SDH/SONET-based optical edge devices (OEDs), also known as MSPPs or MSTPs, are becoming more packet-centric with each passing quarter, legacy service interfaces (from low-speed SDH/SONET down to E1/T1) are growing steadily. A key driver behind this growth is mobile network expansion across the globe.
We expect, for instance, global shipments of E1/T1 interfaces on OEDs to grow at an average annual rate of 8 percent from 2005 to 2011, and STM-1/OC3 client interfaces on OEDs to grow at 29 percent annually. This growth is benefiting optical network systems suppliers that offer compact, outdoors-suitable, and multiservice/multiprotocol OEDs aimed at wireless carriers’ radio access and metro core networks. This segment should continue to be a hot one for vendor product innovation and carrier investment, as mobile operators around the world try to improve the efficiency with which they manage the traffic emanating from new packet-based wireless services. (For more information see‘Wireless backhaul landscape’ report published in Ovum’s Optical Networks: Global advisory service.
Based in Asia since 2001, Matt Walker is a senior analyst in Ovum RHK‘s Network Infrastructure practice, specializing in Asia-Pacific telecoms markets. He has 11 years of experience in the telecoms industry, most recently focused on network issues such as: optical network migration; carrier Ethernet; packet-optical convergence; FTTH; IPTV; IMS; and new methods of (and applications for) broadband wireless access.