Service providers take note: Wireless operators are stuck in traffic and it’s a golden opportunity for Metro Ethernet and wireless backhaul providers.
By traffic, we mean specifically wireless data and video traffic. Mobile operators have seen in the last six months the adoption rate of these bandwidth-hogging services skyrocket, and that, in turn, is driving the need for more and more backhaul. Most towers are served by copper from the LEC, but that’s not going to cut it as data-video usage goes into hockey-stick mode, led by the iPhone and other affordable smart devices, text messaging moving beyond the teen queens, and 3G and 4G upgrades that make the data and video experience a broadband experience.
In general for the COMPTEL community there is a huge opportunity for an alternate access vendor, particularly given the deployment of 3G and 4G mobile systems, said Taylor Salman, solutions marketing director at network specialist Ciena Corp..
“One issue in particular is Sprint’s 4G WiMAX rollout, which is in rapid deployment mode in order to capture market share for next-gen IP-based mobile systems,” Salman said. “And Verizon Wireless is pushing hard to follow suit with LTE. That means they have to rebuild their entire backhaul networks, and transition from TDM to Ethernet.”
That transition requires a lot of capex for mobile operators should they do it themselves — very hard on the heels of the immense cost to upgrade the access side of the house. “So they’ll be more inclined to move that expenditure to the opex side of the ledger by leasing backhaul from those with fiber, existing metro EN footprints and wireless systems.”
It’s also an opportunity to capture more business from existing customers. “Many of the service providers participating in COMPTEL already serve wireless carriers from the mobile switching center (MSC) to the central office where traffic is aggregated,” said session leader Ron Mudry, CEO at backhaul provider Tower Cloud. “Now carriers are looking for someone to go end-to-end, back to the MSC from the tower. So service providers need to find a way to get to the tower themselves, or partner with someone who can, otherwise their legacy base is in jeopardy.”
Success will only come, however, if the service provider understands the unique needs of the mobile operators.
“There's a tremendous opportunity to generate new revenue for alternate access,” said Salman. “The ones who will win that business are the ones with lowest cost, who are ubiquitous to as many towers as possible and who provide technical requirements. Those are the three criteria and in that order.”
From a cost perspective, because of rapidly rising data rates to the tune of 10 to 100 times that of legacy services, TDM becomes economically unfeasible — Ethernet offers a much lower cost-per-bit.
Then there’s the technical side. “Data services are changing, so we see more video services, and all voice will eventually transition to VoIP,” explained Salman. “More apps will be peer-to-peer, over distributed systems, which is a completely different animal than the predictable, hierarchical voice pattern from before, which is easy to manage. Now you have distributed traffic flows.”
That means operators need to support multitiered QoS for video and voice, and manage the bandwidth appropriately to make sure priority traffic is getting through. They also need multiple path diversity and failover capabilities.
There are also convergence requirements. “You have to see that you’re not just backhauling mobile traffic, but also residential and enterprise traffic, which have different needs in terms of QoS. So you have to have the efficiency to carry all that traffic on one network.”
Management is another technical issue. “Most of the operators are used to dealing with the TDM/SONET world and they like the predictability there, and are now looking for management capabilities in Ethernet,” said Salman. “Overhauling the entire network means provisioning thousands of new circuits. That will ramp up the costs if the provisioning is not efficient and has some automation to it as they turn up thousands of new circuits.”
To discuss these issues with Mudry and Salman will be a Tier 1 wireless carrier, unannounced at press time; Kurt Van Wagenen, president and CEO of backhauler FiberTower Corp.; and Dan Caruso, president and CEO at Zayo, also a backhaul provider.
“We’re bringing broad representation from all parts of the backhaul industry to this discussion,” Mudry said. “The plan is to dig in deeper into the trends in this market and talk about the competitive landscape. And also about how customer needs are going to change as they're rolling out their 4G services and migrating from T1s to Ethernet, and the different technologies from fiber to wireless, that they can use for that.”
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