Cable Well-Positioned for Backhaul Business

Mobile Backhaul to the Future The global cellular backhaul market is expected to reach revenues of $9 billion by 2015, fueled by mobile broadband's seemingly insatiable demand for more capacity, according to an updated forecast by Dell'Oro Group.

As 4G LTE continues its advance, backhaul networks are increasingly transitioning to IP-based technologies. Accordingly, routers and switches will account for 30% of the $9 billion in revenues, representing a doubling of this segment over a five-year period, Dell'Oro's research indicates.

These developments stand to benefit cable operators not only from a sheer supply/demand perspective, but also given the state of their infrastructure. "When it comes to capacity on the core, cable operators are the ones buying the big new routers and optical systems," said Jimmy Yu, Dell'Oro's senior director of optical and microwave research. "They are not as hindered [as telcos] with a legacy [copper] network. They are a more packet-friendly type network."

Indeed, fiber-rich cable networks can be leveraged to extend service to cell sites, providing MSOs a "big advantage" compared to incumbent providers, said Jay Clark, director, carrier product and sales operations, Cox Business Services. "[Cable] has a newer and more modern fiber infrastructure that is very dense in the areas we serve."

The company's commitment to providing backhaul services in its markets is paying off. In 2010, the Cox Business' wholesale division accounted for 10% of the company's $1 billion in revenue. Wireless backhaul represented a "majority of growth" in this wholesale segment and should continue to do so over the next several years as well, Clark said. He noted that Cox currently serves 3,600 cell towers with fiber.

Room to Grow

Industry-wide, cable operators today serve close to 10% of the approximately 250,000 cell sites in the United States. However, of that 250,000, only a small fraction currently are high-capacity Ethernet-enabled. "[And] with packet-based backhaul, [cable operators] hold a significantly higher percentage of those towers because they have deployed more recently [than telcos]," said Chuck Kaplan, Ciena's vice president of portfolio services.

Specifically, Kaplan cited a Ciena-commissioned study indicating that while only 31,000 U.S. cell towers are currently served by Ethernet backhaul, this number will jump to 327,000 of the projected 345,000 towers that will constitute the U.S. market by 2015.

This forecast demand for Ethernet-enabled towers illustrates the incentive for cable operators to continue targeting the backhaul market. The good news is that revenue actually may prove to be greater than anticipated: The amount of data traveling over wireless networks more than doubled from 2009 to 2010, said Bill Beesley, principal solutions architect, packet optical networking, for Fujitsu Network Communications.

"Even where MSOs are already serving cell towers, the increased demand for more bandwidth will provide opportunities to generate more revenue than they are already having today," Beesley said. He added that cell towers today generally serve two wireless operators; in the future, each tower will likely accommodate four or more carriers.

In addition, as MSOs are rolling out Ethernet to provide wireless backhaul, they are using the same technology to offer commercial services to businesses. In June, for example, Comcast announced metro Ethernet services available in 20 U.S. markets to businesses with 20-500 employees.

"I believe the business case for wireless backhaul is self-funding, but of course if you were the person making the fiber construction plan, you would probably build as intelligently as you can using information about businesses and your plant," Kaplan said.

Merger Mayhem

The demand for backhaul bandwidth is so great that not even the acquisition of wireless giant T-Mobile by AT&T is cooling the opportunity for cable operators -- at least not immediately.

"The supply of fiber or of packet-based backhaul is so much less than the demand, that in a sense, it looks like a seller's market for several years to come. No matter who you are, if you can provide cost effective packet-based backhaul to any cell tower, it is generally welcome," Kaplan said.

Down the road, there may be risk depending on the terms of the merger. Towers could be decommissioned as a result of redundancy. In markets in which an operator overlaps AT&T's wireline footprint, the merged company could migrate towers to its own network. "[However,] it is going to take several years to get the initiatives underway. In the near term, we don't see too much of a change," Cox's Clark said.

Tech Opportunities

Meanwhile, a recent Wireless Backhaul Report and Order issued by the FCC will make more spectrum available and thus make it easier to use fixed microwave links to provide backhaul services -- a faster and less expensive way to reach cell towers. While underground fiber construction costs about $25 per foot, installing two ends of a point-to-point microwave link costs between $25,000 and $30,000, bringing the approximate cost per foot to a couple of dollars, Kaplan said.

This is good news, particularly for the future, when wireless carriers will deploy 4G LTE in smaller tier markets that may be less accessible by fiber. "Microwave is not something we do a lot of today, but it could be a tool we look to use where it makes sense to help provide more coverage to our customers," Clark said.

Monta Monaco Hernon is a freelance writer. She can be reached at

Get the Broadband Technology Report Newsletters Delivered to Your Inbox

Subscribe to email newsletters today at no cost and receive the latest information on:

  • Video Technology
  • Network Technology
  • Technology Alerts
  • BTR LATAM (Latin America)

SCTE-Cable Tec Expo 2016 Video Show Dailies

BTR's SCTE-Cable Tec Expo Video Show Daily, Day 3

BTR's SCTE-Cable Tec Expo Video Show Daily, Day 3

In our Video Show Daily for Day 3 of exhibits at SCTE Cable-Tec Expo in Philadelphia, BTR Editorial Director Stephen Hardy covers trends in distrib...

BTR's SCTE-Cable Tec Expo Video Show Daily, Day 2

BTR's SCTE-Cable Tec Expo Video Show Daily, Day 2

In our Video Show Daily for the second day of exhibits at SCTE Cable-Tec Expo in Philadelphia, BTR Editorial Director Stephen Hardy highlights furt...

BTR's SCTE-Cable Tec Expo Video Show Daily, Day 1

BTR's SCTE-Cable Tec Expo Video Show Daily, Day 1

BTR Editorial Director Stephen Hardy reviews the hot technologies and announcements from the first day of exhibits at SCTE Cable-Tec Expo 2016 in P...

Diamond Technology Reviews - 2016 High Scores

2016 Diamond Technology Reviews Slideshow

2016 Diamond Technology Reviews Slideshow

Diamond Technology Reviews 2016

Diamond Technology Reviews 2016

BTR's Diamond Technology Reviews, now in its twelfth year, is a technology recognition program wherein vendors serving the broadband cable ...

Related Articles

Demystifying Home WiFi

Demystifying Home WiFi

October 25, 2016

By Monta Monaco Hernon - As WiFi continues its march to ubiquity, custom...

Status Report: Full Duplex DOCSIS

Status Report: Full Duplex DOCSIS

October 19, 2016

By Monta Monaco Hernon - Specification development for Full Duplex DOCSI...


WOW! Gigabit: Where Technology and Strategy Meet

October 18, 2016

By Monta Monaco Hernon - When WOW! launched gigabit Internet speeds in A...


2016 SCTE Cable-Tec Expo Wrap Up

Whether you couldn't make it to Cable-Tec this year or want to see if you missed anything while you were there, you'll want to join BTR editors Stephen Hardy and Ron Hendrickson as they reveal their picks for the...

October 12, 2016
Sponsored by

Counting the cost: Efficiently transitioning from HFC to FTTH

HFC networks are uniquely positioned to provide compelling and competitive services, and are also uniquely positioned to transition to symmetrical FTTH as commercial requirements demand.  This webinar will d...

Date:September 22, 2016
Sponsored by

Maintaining High Quality of Experience in an Adaptive Bitrate System

This webinar will look at the many points in an ABR system where the video is touched.  From ingest (satellite, file, and IP), to egress, each point should be qualified for compliance to help maintain a high...

Date:August 25, 2016
Sponsored by

White Papers & Special Reports

Cable VoIP 2.0: Voice Moves to the Cloud

October 2016

Cable providers led the charge on the VoIP evolution and won customers and market share. Now voice networks are evolving again. The cloud voice platform has ...

Understanding Ultra High Definition Television

October 2016

Over the last 10 years, high definition television (HDTV) has been replacing standard definition television as the expected viewing format for television pro...

Are You Ready for DOCSIS 3.1? The Future of Cable Technology and How to Prepare Your Network

October 2016

DOCSIS 3.1 promises 10x capacity throughput and a range of technical benefits for cable providers and users alike. Are you ready? Discover the technical adva...

BTR Blogs

BTR Managing Editor Ron Hendrickson

FCC Rethinks Set-Top Plan

September 10, 2016

By Ron Hendrickson - The FCC has reworked the "unlock the set-top b...


In Memoriam: Richard Covell

August 18, 2016

By Rob Stuehrk, Publisher - We at Broadband Technology Report were sadde...

BTR Managing Editor Ron Hendrickson

Court Overturns FCC Municipal Broadband Order

August 11, 2016

By Ron Hendrickson - You win some, and you lose some, and the FCC just l...

Featured Hangouts

4K 4 U: How to Prepare for UltraHD Video

4K 4 U: How to Prepare for UltraHD Video

4K/UltraHD video is coming - consumers are buying the TV sets, and more content is becoming available. Watch this inf...

DOCSIS 3.1: A Look Ahead

DOCSIS 3.1: A Look Ahead

Watch a 30-minute video chat of experts from a variety of related disciplines discuss how close deployments really ar...

Featured Hangout

4K 4 U: How to Prepare for UltraHD Video

4K/UltraHD video is coming - consumers are buying the TV sets, and more content is becoming available. Watch this informative Hangout on demand by clicking the link above.

Sponsored by Verimatrix.