There is no question that LTE will provide faster mobile broadband access and help meet the EC’s goal of bringing fast broadband to 100% of the EU’s population by 2020. However, wireless solutions provider Bluwan believes operators will face major problems finding enough capacity to backhaul their LTE networks unless they address the problem quickly.
Bluwan has pioneered the use of ‘Fibre through the Air’ (FTTA) technology to provide a high-speed, high-capacity, point-to-multi-point wireless solution that allows service providers to increase existing network capacity in the 42GHz and 12GHz spectrums. It deploys ultra-wide band access or backhaul solutions at a fraction of the cost of optical fibre.
Shayan Sanyal, chief marketing officer for Bluwan, says: ‘The question is how quickly will LTE happen and if there are any roadblocks slowing it down, how can they be overcome and the rollout of LTE accelerated?’
One of the major stumbling blocks for mobile operators in accelerating the growth of LTE is backhaul capacity. In the UK a lot of backhaul is delivered using copper wire, which provides 2Mbps, so typically it is used for voice. When copper wires are bonded together they can deliver 30Mbps to a base station, which is generally used to backhaul 3G services. But LTE requires around 100Mbps, so no amount of copper is going to solve the problem. That leaves two options, according to Sanyal: fibre or microwave.
Fibre is the most efficient way to bring backhaul to LTE because it provides gigabit capacity, but it requires expensive trenching to each base station. In urban areas the cost may be justified given the density of population, but the expense is too high for lightly populated rural areas. That leaves the microwave option.
There are two microwave solutions, says Sanyal: point-to-point (P2P) and point-to-multi-point (PTMP). Bluwan argues that PTMP provides a much more economical solution, as one PTMP base station can light up the same geographic sector as a number of PTP base stations. ‘We deliver more than enough capacity to meet the requirements for up to 25 base stations,’ says Sanyal.
‘We believe that unless mobile network operators start adopting these kinds of approaches to backhaul they are going to be faced with an economic and physical challenge to backhaul their LTE networks, because they will not have time to build out all that fibre fast enough to meet the data demand,’ he says.
‘On top of that, the microwave options they have are going to cost them a lot of money in terms of building the infrastructure and then running it,’ says Sanyal. ‘On that basis alone we think backhaul is going to change in terms of where operators are spending their money from PTP to PTMP,’ he adds.
Bluwan has commissioned a study into how the rollout of LTE might be accelerated and how the take up by consumers can be speeded up. Critically, both these things will help the operators get a return on their investment faster.
‘Our paper postulates that in order to get high capacity sectors like this you need to look elsewhere in the spectrum where people haven’t gone before – virgin spectrum, as opposed to beach front spectrum,’ says Sanyal. That means 40GHz and above where there are big chunks of spectrum capacity available.
‘If you make that spectrum available and use it, you could lower the cost of deploying LTE. By lowering the cost of LTE you will increase the supply of LTE across Europe,’ points out Sanyal.
The paper argues that a major input cost for mobile operators in delivering capacity for mobile data via LTE is the backhaul cost. Studies have shown that 14%-15% of operator expenses are related to backhaul - nearly a fifth, so anything that can keep that cost down needs to be looked at.
Assuming a microwave rather than fibre solution is chosen for backhaul, Bluwan’s paper argues that a PTMP solution is much less expensive than PTP. ‘We calculate we can yield a 65% saving in capex and an 80% saving in opex compared with an equivalent PTP system,’ says Sanyal. ‘With PTP you have to create each link, but with PTMP you just create a sector and light up multiple end points.’
He continues: ‘Our analysis focuses on the change that consumers can benefit from as a result of better and cheaper mobile broadband services. When the supply of a product or service is pushed out you create what is called a consumer surplus. The consumer surplus is the difference between the total amount a consumer is willing and able to pay for a product and the total amount they actually do pay. We have estimated the consumer surplus for deploying a technology like ours would very conservatively add up to €1.5bn for the EU,’ says Sanyal.
Bluwan’s premise is that over the next 10 years copper as a backhaul solution will reduce, while microwave and fibre will continue to grow. In the UK today microwave comprises 55% of all backhaul. Bluwan expects that to grow until 2014 and then stabilise at around 70% of total backhaul and maintain that level until 2020. The rest is being supplied by fibre, which accounts for around 20% at the moment. ‘Fibre will grow at around 25% a year but not more as it is not sustainable and copper will reduce,’ says Sanyal.
Bluwan’s paper makes the further assumption that PTMP will take over from PTP as the favoured microwave backhaul solution. In 2011, 90% of backhaul is PTP and 10% is PTMP. Bluwan forecasts that PTP will decline to 20% of the national backhaul market by 2020.
‘So, the premise of our paper is that the faster you allow 40GHz to be used Europe-wide, the faster you are going to get ready-built LTE networks that are backhauled sufficiently to meet consumer demand,’ argues Sanyal. ‘The faster you can do that, the faster you can create the change in price and the faster you can create the consumer surplus in every European country that is rolling out LTE.
‘We are using this as the basis to go to the EU and say you need to start making sure EU states begin allocating 40GHz licences and put auctions in place now, rather than later when operators realise they have a capacity crunch on their LTE networks,’ says Sanyal.
Bluwan is submitting its paper not just to the regulatory part of the EU, but also the Director Generals for Innovation, Competition, Social and Digital Agenda, which all have a vested interest in the broadband package.
‘Our objective is to make them understand that they need to put pressure on the individual member states of the EU to start thinking about holding auctions in the non-beach front space, 40GHz and above, and do it on a technology and application neutral basis,’ says Sanyal.
In Bluwan’s view operators need to accelerate the search for LTE backhaul solutions now, so that when the technology reaches a critical mass they are able to meet the demand. Licences and the construction of 4G networks will be expensive, so the sooner they can get a return on that investment, the better.
‘Operators need to get that ROI quickly,’ says Sanyal, ‘otherwise it will be very difficult for them to justify the next level of investment on LTE Advanced, which is just around the corner.’
Bluwan is lobbying national regulators and operators at the same time. ‘If you have an operator that wants to cut its backhaul costs for LTE and is willing to use PTMP technology in the 40GHz spectrum to do so and the regulator has already gone through the process to bring that spectrum to auction, then you can get an accelerated auction process,’ says Sanyal.
For once the UK is ahead of the game, as it has already auctioned its 40GHz spectrum with T-Mobile, UK Broadband and MLL Telecom securing the licences. In the UK, Bluwan is looking to begin a backhaul pilot project in Q4 this year. It has also deployed its backhaul system into its existing Paris trial. Operators and regulators can then come and test the system and find out more about it. ‘We hope it will accelerate the consultation and auction process across the EU,’ says Sanyal.