Ethernet backhaul surges as mobile operators deal with data
A new report from analysts Infonetics has found that mobile operators are turning to Ethernet to meet their increasing mobile data
backhaul needs. It says that worldwide spending in mobile backhaul equipment rose to $4.5 billion in 2008, up 15% on 2007. Microwave Ethernet connections are growing fastest, representing 43% of all new connections in 2008, compared to 27% in 2007.
The deployment of HSPA
networks has been the
trigger for many operators
to upgrade their backhaul
networks to IP/Ethernet.
Infonetics predicts that
revenue in this section
of the worldwide mobile
backhaul equipment
will grow at an annual
compound growth rate
of 57% between 2007
and 2011.
Consumers are being
encouraged to use mobile data
services both through a range of new
devices and applications and better
mobile data tariffs. These include
Web browsing on the iPhone and
the increasing use of USB dongles for
mobile data connectivity in laptops.
However, this growth in mobile data
is putting operators’ voice-centric
backhaul networks under increasing
strain and without higher-capacity
backhaul networks, service quality
in both voice and data will suffer.
Traditionally when more capacity
was needed in backhaul networks,
operators added a new T1 or E1
leased line. However the economics
for this simply don’t work in data networks, so operators are looking
to Ethernet-based solutions that
allow them to increase the capacity
of their backhaul networks without
large incremental costs.
Currently microwave is used in 53%
of all mobile backhaul networks, and
it is particularly prevalent in Europe,
Middle East, Africa, Asia-Pacific,
and Central and Latin America. In
these areas in particular, mobile
operators are upgrading to Ethernet
microwave backhaul.
“Ethernet microwave is an attractive
option for operators because
it can be used to implement a
hybrid approach or a single packet
backhaul approach, using either
dual (concurrent) radios or pure
packet radios (with pseudowires).
Both approaches can save operators
millions in annual service charges,
which, in today’s environment,
could make or break an operator,”
says Michael Howard, principal
analyst at Infonetics Research and
lead analyst of the report.
In fact Infonetics says that by 2011,
service providers using traditional
mobile backhaul technology such as
PDH, ATM over PDH, or SONET/SDH will be paying roughly three to 30
times as much in service charges per
connection as those using Ethernet,
DSL, coax cable, or PON.
Mobile backhaul isn’t the only area
outside the local area network
(LAN) where Ethernet is starting
to dominate. It is also becoming
a key wide area network (WAN)
technology. A summer report from
Infonetics found that worldwide
Ethernet service revenues grew 33%
to $12.5 billion in 2007, matching
IP MPLS VPN
revenues, which
grew 20% to $13
billion. Infonetics
expects both
markets to grow
strongly right
through to the
end of its forecast
period in 2011.
Analyst Heavy
Reading agrees
with this upbeat
assessme t
of Ethernet in
the WAN. It said that sales of
carrier Ethernet switch/routers
(CESR) equipment grew 12%
year-on-year to Q2 2008, despite
the slowdown in the economy. “Intensifying competition and
macroeconomic weakness
have taken some steam out
of the hard-charging CESR
market, but the fundamental
business drivers remain strong
and should still fuel market
growth of as much as 15% per
year through 2012,” said Stan
Hubbard, Senior Analyst for Heavy
Reading and author of the CESR
Quarterly Market Tracker.