In a new five-year mobile backhaul contract with Vodafone, announced last week, BT Wholesale will provide high-speed connectivity between Vodafone's UK base stations and switches as well as backhaul for both voice and data, with speeds up to 60Mbps, through its 21CN-enabled Ethernet service.
BT Wholesale, who also signed a five-year mobile backhaul agreement with T-Mobile in July 2007, said it would use leased lines to provide the service and as well as Ethernet when available.
There are a lot of technical concerns now about the reliability of T1/E1 leased line use for mobile backhaul as mobile data traffic increases, especially in peak times, through the growth in usage of high-bandwidth mobile applications.
Last year Ovum RHK estimated that 90% of backhaul traffic is carried by the mobile operators themselves or by a business related to their parent company (see our report, 'Forecast: Wireless backhaul opportunities, global').
However, we expect this figure to change as it will become very expensive for mobile operators who do not have a fixed-incumbent as a parent to invest in new technologies that can cope with the new requirements for mobile backhaul services. There is also a possibility of using a hybrid infrastructure: using T1/EI leased lines for voice and Ethernet solutions for data.
Therefore, we believe that most other mobile operators will follow Vodafone and T-Mobile's example and partner mobile backhaul service providers that can offer flexible and scalable bandwidth to meet increased data application demand.
This is a good market opportunity for BT that has made a considerable investment in its 21CN to generate just such new revenue streams.
Fernanda Mello Veiga, senior analyst at Ovum