Mobile vendors face backhaul issue

Copper cables, optical fiber and leased lines aren't as sexy as the music phones and mobile video services that are in the limelight at the CTIA Wireless show in Orlando this week, but they're on a lot of people's minds.

Wireless networks have to come back to Earth eventually in order to talk to the Internet and the traditional wired phone network. What gets them there is backhaul, which typically has meant a T-1 leased line (1.5M bits per second) to each cell site. As the speed of cellular networks approaches the point where that's only enough bandwidth for one subscriber, mobile operators have turned to using three or more T-1s.

Vendors and some observers say that can't last: Operators will need new technologies to feed cell sites that will be expected to support 3G (third-generation) services such as HSDPA (High-speed Downlink Packet Access) and EV-DO (Evolution-Data Optimized) Revision A under heavy use. Future 4G services will demand even fatter pipes -- hundreds of megabits per second, estimates Michael Howard of Infonetics Research Inc.

That doesn't mean 3G users will see their phones grind to a halt, said IDC analyst Godfrey Chua. Data services use is growing quickly, but not explosively, which gives carriers a breather. That said, the alternatives to leased lines present challenges, according to Chua. WiMax high-speed wireless and even metropolitan Ethernet don't necessarily deliver the same reliable quality yet, Chua said.

If operators just add T-1s, eventually they'll be squeezed, Howard said.

"There's all this bandwidth being added, but what a carrier can charge per month is staying fairly flat because of competition," Howard said. What's needed is not just more capacity but a more economical form of connectivity to the cell site, he said. Ethernet -- over fiber, copper wire, or even point-to-point wireless -- will make up most of this, according to Howard. For various reasons, microwave is turning into the choice for Europe, said IDC's Chua said.

Telecommunications vendors are eager to aid in the transition. Executives of Nokia Siemens Networks, the infrastructure company that is set to debut next week, told press and analysts at CTIA that they see a "paradigm shift" in cellular backhaul. Nokia Siemens sees huge potential for its optical and microwave infrastructure gear, and possibly for wireless mesh technologies, which can cover a large area with just a few links to the wired network.

For 4G systems, Nortel Networks Corp. showed off metropolitan Ethernet as the answer: The fast packet-based technology could save an operator 40 percent versus comparable bandwidth on T-1s, executives said at the show. Wi-Fi mesh technology is another possibility, they said.

Mobile operator Sprint Nextel Corp. also sees a major change coming. "You can't do it on T-1s anymore," said Barry West, chief technology officer and president of Sprint's 4G business unit. He expects carriers to deploy a combination of microwave, proprietary technologies such as Motorola Inc.'s Canopy wireless mesh, leased DS-3 lines (45M bps) and WiMax.

The latter, which Sprint plans to roll out nationwide as the first big U.S. carrier to embrace it, could turn the country's third-largest mobile operator into a supplier of backhaul. So far it's more often been on the buying side, because except for China Mobile Communications Corp., it's the only major mobile operator in the world that doesn't also have a landline business, Howard said.

The apparent crisis looks a bit different for AT&T Inc., the nation's largest carrier in both wired and wireless. With a wired "last mile" of its own in much of the country, AT&T can essentially buy the access from itself. Richard Burns, president of network services, said he would deploy Ethernet over fiber at new sites where there isn't already a wired network nearby. But in most cases it's more economical to use T-1s than to invest in new technology, and AT&T uses as many as 10 of the lines if necessary. Even where it has to lease the lines, AT&T has enormous wholesale bargaining power because of its size, Burns said.

If users do see data slowdowns from the backhaul challenge, they will be local instead of national in scale, Infonetics' Howard said. And at the end of the road, there's likely to be good news, according to Chua of IDC. Once carriers have plenty of capacity on the back end, they'll be less aggressive about enforcing their small-print limits on how much data a mobile user can consume over the course of a month, he said.

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