Cost per bit beating revenues on HSDPA services?
It’s a growing concern that as HSPA networks roll out and, more importantly, as data intensive service start to be used across those networks, the existing backhaul infrastructure will become too expensive to run.
The cost per bit of moving traffic back from the NodeBs back into the core network will outweigh the revenue per bit, if operators keep with a strategy of adding more leased line E1s/ T1s, or microwave capacity, as required.
Jeremy Steventon-Barnes, director of business solutions at Tellabs, said that operators are beginning to issue RFPs for technology that can deliver TDM and IP traffic across DSL and Ethernet connections back to the core. Tellabs has a new switch, the 8605, aimed at this market, and much of its 10% increase in international sales (non US) in 2006 was driven by the mobile market, a spokesperson claimed.
The driver for this change is cost and efficiency. Steventon-Barnes reckons that once an operator is looking at 4-6 2MB E1 connections, it begins to become more cost efficient in most developed markets to move to an Ethernet service, or to a DSL connection.
Fibre and DSL line availability in most established urban areas in developed markets is adequate, Seventon-Barnes said, to support this model.
J S-B said the ROI on the investment in this model, which could involve tens of thousands of switches being deployed across a network, is “extremely quick”, with paybacks in terms of power and space efficiency, as well as reduced physical connectivity costs. The MPLS Pseudowire technology that supports the multi protocol transport is also stable. Tellabs is also hoping to exploit its existing installed GSM backhaul deployments as its products all operate under the same management system.
Another way for operators to reduce backhaul requirements is to roll out femto cells in enterprise and residential buildings, linked back to the core over DSL without data traffic having to touch the macro cellular network. Certainly O2’s cto recently told Mobile Europe that reduction in backhaul costs was amongst the reasons behind his enthusiasm for residential femto cells. Yet Steventon-Barnes made the point that there is a siginifcant proportion of traffic generated whilst users are mobile, rather than within a “home” zone.