Building out mobile backhaul without overspending

Chelsea Reil
31 Aug 2009

Mobile backhaul infrastructure spending will grow steadily over the next few years as telecoms build out the infrastructure needed to support increased mobile data traffic on 3G and forthcoming 4G networks.

As telecoms build out their backhaul systems, they will need to strike a delicate balance between having enough backhaulinfrastructure in place to keep customers happy and not spending so much that it kills profitability. Infonetics Research recently reported that mobile backhaul equipment spending by carriers increased 19% in 2008 to $4.6 billion worldwide. And that spending will more than double to $11 billion by 2013.

Much of the spending in North America has been on replacing copper connections with faster fiber optics and point-to-point microwave connections.

"In North America, 75% of backhaul connections are on copper, which turns out to be a problem," said Michael Howard, co-founder and principal analyst for carrier and data center networks at Infonetics. "Close to 10% are on microwaves, and that number is growing fast. And the remaining 15% are on fiber. AT&T and Verizon are quickly getting fiber to as many of the cell sites as they own, and the others are getting fiber where it makes business sense.

"In North America, by 2013, we think we'll have over 20% of the backhaul connections on microwave, and a fast-growing number will switch from copper to fiber," Howard continued. "This is where a lot of the money is going."

4G raises mobile backhaul upgrade needs

Driving the carrier spending is LTE deployment, installations of IP base stations with an IP hub interface or with Ethernet, and the addition of high-capacity, high-speed packet access (HSPA+).

"There's a lot of data traffic going onto mobile backhaul networks," Howard said. "Voice takes up very little bandwidth. But obviously data is hundreds of times the number of bytes that can be passing in the same time you could be talking. Not only is there more bandwidth, but we're using it more frequently. This is causing a lot more traffic on the backhaul networks."

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