Operators need to take into account the total cost of ownership of their next generation backhaul strategy, and that includes spectrum costs. But with microwave spectrum costs set to rise, it will take careful planning to ensure operators have the best solution, says Alan Solheim
The promise of new services and new revenue streams is driving the adoption of next generation radio access technologies such as HSPA+ and LTE. These technologies promise a mobile internet experience that is virtually the same as broadband access at work or at home,. creating an entirely new profile for the traffic coming from the base station and, in turn, the backhaul network.
HSPA+ networks require 50 to 100 Mbps per base station and LTE networks require 100 to 200 Mbps per base station – an order of magnitude more than traditional 2G or 3G networks. In addition, this traffic is predominantly IP based. Traditional TDM radio systems can not handle this backhaul traffic, and leased E1 circuits are not cost effective. The viable backhaul solutions going forward are owned or leased services based on fibre or packet microwave radio.
While fibre provides almost unlimited bandwidth, the majority of the base stations do not have fibre connections. In addition, depending on the amount of radio access spectrum that is available to the mobile operator, additional base stations will have to be deployed in order to deliver the expected bandwidth per user. It has been estimated that operators with 50 MHz of radio access spectrum will have to double their base station density in order to deploy advanced 3G services. These new base stations must be placed where they can provide the most effective re-use of the radio access spectrum, and only by chance will they have fibre connections at the most desirable locations.
The net result is that in order to use fibre as the backhaul medium, lateral runs from the nearest fibre point of presence must be installed in the vast majority of cases. The cost of these lateral fibre runs are proportional to the distance, and the cost per meter is proportional to the population density – highest in the city centers where demand for 3G+ and 4G services is greatest.
The business case for packet microwave, on the other hand, is almost distance insensitive. The cost to purchase and install a packet microwave link is relatively constant up to a distance of several kilometers; longer than the typical base station spacing. The combination of these two facts means that a significant portion (majority) of the backhaul network will be implemented using packet microwave. This, coupled with the already heavy use of microwave for the GSM network and other private networks, will result in congestion, especially in the city centres, for the RF channels required to support the new packet microwave deployments.
In response to these concerns, many of the world's telecommunications regulators have implemented new measures to more carefully manage the available microwave spectrum. Several European countries including France and Russia have essentially eliminated larger channel bandwidths (56 MHz and above) in order to encourage greater efficiency in smaller channels . The Office of Communications, the independent regulator in the UK, is addressing spectrum congestion with a pricing strategy that favors higher frequencies and smaller channel sizes.
With most regulators adopting similar pricing strategies, it is clear that larger channels and lower frequencies are cost prohibitive for most operators. While all other cost elements will remain relatively fixed, spectrum cost is proportional to the size of the channel. If the operator has to double the channel size of the backhaul link the cost of spectrum – already one of the dominant cost contributors – will grow linearly. Looking at future capacity requirements, where hundreds of megabits or more will be needed, careful spectrum utilization planning will be essential in order to ensure the ongoing economic viability of these backhaul networks.
Despite the significant impact to the total cost of ownership (TCO), spectral efficiency is often a secondary consideration when evaluating microwave backhaul solutions. The following chart (Figure 2) represents the backhaul business case sensitivity to various cost elements. These costs are varied according to ranges found in existing backhaul deployments, illustrating the potential impact that each can have (positive or negative) to the operator's total cost of ownership.
As shown, spectrum cost has a much greater impact on the operator business case when compared to items such as equipment and installation costs. The wide range of potential impact is due to a combination of pricing variation and the degree of efficiency in existing deployments. Equipment cost, while important, is often overemphasized in the buying decision as it represents a small fraction of the TCO. This highlights the importance of selecting a microwave solution that minimizes key operating expenses such as spectrum licensing. While all other cost elements will remain relatively fixed, spectrum cost is set to rise dramatically, becoming the dominant ongoing expense for operators deploying broadband mobile networks. This is due to the fact that many existing microwave backhaul solutions will not scale sufficiently within existing spectrum allocations, resulting in additional spectrum investment for operators.
Fortunately, next generation packet microwave systems address many of these elements with capabilities such as all-outdoor deployment, reduced antenna sizes, and most importantly a suite of technologies which deliver a dramatic improvement in spectral efficiency relative to previous microwave systems. As shown in the figure below the introduction of higher order modulation, adaptive modulation, Cross Polarization Cancellation (XPIC) and now baseband bandwidth optimization techniques has increased the spectral efficiency by almost a factor of 10 over the past decade. These techniques provide the capability for mobile operators to deliver bandwidth suitable for LTE base stations within their existing 7 or 14 MHz backhaul channel allocations. This avoids the need to spend the time and money on re-engineering the RF portion of the backhaul network, eliminates the concern over backhaul spectrum availability for base station upgrades, and reduces the total cost of ownership by up to 40%, resulting in cost savings that are much higher than the cost of the new equipment.
The demand for mobile broadband services is seemingly insatiable, driving the rapid adoption of 3G and 4G networks. Packet microwave is a preferred technology to provide the backhaul for these networks due to speed of deployment, simplicity and cost. The backhaul technology decision will be much more than about the box cost, but will have to include the total cost of ownership including spectrum lease costs. While the availability of spectrum for the backhaul network of next generation mobile networks is a concern, advancements in the spectral efficiency of packet radios are providing the answer.
About the author of this article: Alan Solheim is VP, Product Management, DragonWave