Ethernet Backhaul For High Speed MDS

The growth of high-speed mobile data services and increased pressure on wireless carriers to cut costs, is driving mobile operators to deploy Ethernet technology in their backhaul networks. Backhaul can be used for both new and legacy traffic and services, creating opportunities for network operators, technology vendors and service wholesalers alike.

Mobile Operator Strategies

Mobile operators will eventually deploy Ethernet backhaul [supported by pseudowires] for legacy traffic as well as new broadband services.

Most mobile operators recognize that migrating to lower-cost Ethernet backhaul is a critical factor in generating viable mobile broadband business models.

Transition To Ethernet Based Backhaul

Transition from existing TDM-based backhaul networks to Ethernet-based backhaul networks can be done a number of ways.

Each method must be analyzed for its suitability to your current TDM network configuration and the timeframe in which that transition can be implemented across multiple points in the network.

Operators that are already building converged transport networks to support cellular services along with WiMax, broadband DSL, or IPTV services will be in the best position to lead the market in migrating their traffic onto Ethernet backhaul.

Currently, such programs are being implemented by SK Telecom, Sprint Nextel, Orange and Telecom Italia.

Transition Timing

Timing is a critical factor in planning Ethernet Backhaul transition.

To prepare for this transition, both fixed and mobile network operators recognise the opportunity presented by Ethernet backhaul and are working on readiness programs, including review of their business processes for making this transition and available infrastructure equipment.

Most mobile operators are planning a slow transition from a TDM backhaul environment to Ethernet backhaul. The main drivers of this slower pace include uncertainty about:

1. the rate of increase in mobile data traffic volumes
2. efficiency gains already being provided by ATM aggregation deployments
3. the immaturity of the Ethernet-based mobile backhaul value proposition
4. confidence in backhaul equipment vendors in implementing and supporting this new technology

Backhaul Equipment Vendors

During the past year, a number of backhaul equipment vendors have emerged, indicating that both large and small equipment vendors are positioning themselves to support Ethernet in the mobile backhaul network.

Backhaul equipment includes:

• Radio access network (RAN) nodes
• Multiservice switches (MSS)
• Multiservice routers (MSR)
• Carrier Ethernet switch/routers (CESR)
• Point-to-point microwave systems
• Pseudowire access gateways
• Multiservice provisioning platforms (MSPPs) and packet transport systems
• Ethernet access devices

Vendor sites contain detailed hardware and software feature roadmaps.

Commecial Transition

Apart from the technical transition, mobile network operators are also facing decoupling of operating costs and revenues as they transition from networks built primarily for voice traffic to a network supporting increasingly large volumes of data, including video.

Data revenue is priced on a 'per bit' model, and is significantly lower than that for voice services. This represents a major downturn in revenue for mobile operators, forcing them to find ways to reduce the cost per bit of transporting data traffic over the backhaul network, into the core network.

Migration Roadmap

Whilst most mobile network operators will begin commercial trials of Ethernet backhaul this year, most will not complete migration from TDM to Ethernet for several years. The transition does not suit a 'big bang' cut over program rollout.

Mobile operators need time to feel confident that Ethernet backhaul for both voice and data services will meet both their technical and commercial expectations. So expect:

• 2007 - Commerical trials
• 2008 - Limited scale commercial deployments
• 2009 - Large-scale commercial deployment

Questions You Should Be Asking

Mobile Network Operators

• How do your plans for Ethernet backhaul deployment compare with those of your competitors?
• Will your transition strategy deliver the best cost and performance efficiency for your network?
• Which technology suppliers will best meet your Ethernet backhaul requirements?

Wireline Wholesale Service Providers

• How strong is demand for Ethernet backhaul likely to be?
• Is your long-term plan positioned to capitalize on growing demand for Ethernet backhaul services?
• What key competitors are emerging for Ethernet backhaul services?
• What is the best transition timing for commercial viability?

Backhaul Technology Vendors

• How will backhaul deployment strategies affect your business?
• What is the most likely timeframe for the transition from TDM to Ethernet backhaul?
• Which operators are likely to lead the drive?
• Where are the emerging opportunities to increase market share?
• Do your products and marketing meet network operator plans and expectations?

Wireless Equipment Suppliers

• Will demand for your products be affected by new deployment plans for Ethernet backhaul technologies?
• Which technologies are the likely winners for tomorrow's wireless backhaul networks?
• Is your company positioned to take advantage of anticipated changes?

Investors

• Which technologies are emerging as the winning solutions for Ethernet backhaul?
• Which companies are the likely market leaders of these solutions?
• What profitability impact with the transition from TDM to Ethernet have in the wireless service sector, and over what timeframe?
  

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