There has been much hype about the wonderful set of new services that are just around the corner as soon as the new WiMAX or LTE (News - Alert) radio access networks have been built and the new multi-function smart phones are widely available. Unfortunately, unless we are willing to accept a user experience similar to the initial iPhone (News - Alert) users, the entire network must be upgraded to be able to deliver the significantly increased bandwidth implied by these new services. For early iPhone adopters, limited network bandwidth prevented all but the most rudimentary services, which took a painfully long time for each response.

 

The bandwidth available in the fiber-based core network is not at issue, the bottleneck is typically the middle mile: the backhaul network used to connect the base stations to the core network or mobile switching center (MSC (News - Alert)). In North America this backhaul has been historically provided by leased T1 lines from the local wireline carriers. This circuit-switched infrastructure is not optimized for the demands for the new services. First, it does not deliver the reduction in cost-per-bit with increasing bandwidth demanded to have an acceptable business case for next-generation services. Second, the bulk of new services are IP-based and not well-suited to being transported across a circuit-switched infrastructure. Finally, the operational benefits of a packet switched network — statistical multiplexing for enhanced efficiency, simplified provisioning and scalable bandwidth — are much more difficult to achieve.

 

What are the alternatives to the traditional leased line? DSL technologies over existing copper-based infrastructure have been touted as an alternative, however, the bandwidth reach of these technologies limits them to base stations close to the central office. In addition, they are susceptible to interference from lightning and other electrical sources, and are ultimately still owned by the local exchange operator who may or may not be in direct competition with the mobile carrier. Fiber provides almost unlimited bandwidth, however, the percentage of base stations currently connected by fiber remains well below 10%. It is possible to build out fiber laterals from nearby fiber POPs, but at construction costs of ~$100 per foot it does not take a very long lateral before these costs become prohibitive. Finally, IP-based point-to-point microwave can provide required bandwidths with correct economics without the need for a time-consuming and expensive installation procedure. Although all three of these technologies will be used, whether in an owned or leased model, it seems clear that in the near term a significant portion of the network will use IP radios for the backhaul solution.

 

North American carriers, accustomed to leasing backhaul bandwidth, do not have the organizational infrastructure to manage large network build-outs described above. The required human capital to do the network design, installation and commissioning will need to come from equipment vendors or system integrators. The likelihood of mobile carriers to adopt this model and take on responsibility for the backhaul network as well as the radio access network is opposed by years of reliance on leased services. This organizational inertia, more than any other factor, will slow the deployment of required backhaul solutions and has the potential to create the backhaul bottleneck that will prevent a successful launch of next generation, bandwidth-hungry services. The carriers that get this equation right will prosper, and those that struggle with the shift will be left behind.