Mobile Backhaul: A Changing and Growing Opportunity

BTR_Feature_Art_cellphone_8_5_13 The explosion of wireless traffic caused by tablets and smartphones should lead cable operators to do two things: Smile and work hard to understand what will be required of them.

The first of those suggestions comes pretty easily to an industry choosing among backhaul, commercial services, home automation and multiscreen as its next cash cow. The second is quite a bit more difficult. This is especially true considering that what it takes to succeed in the backhaul sector is changing quickly as the wireless industry improvises ways to meet accelerating demand.

The good news is that cable operators are benefiting in two ways from the love affair between people and their mobile devices. The first, of course, is that operators are adding to the bottom line by offering video to tablets and smartphones. The second and more subtle benefit is that they are partnering with cellular companies to help them backhaul the great amount of traffic being generated by their subscribers.

Cable operators will be in good position no matter how the mobile backhaul technology coalesces, said Leon Venton, a product line manager for ARRIS (NASDAQ:ARRS). "MSOs are well-suited to work with the telcos and MNOs [mobile network operators]," he said. "MSOs have a large fiber base, and more work is being done to push fiber deeper into networks."

The industry enters the game with relatively modern, fiber-rich plant that in general maps nicely to wireless carriers' macro cell towers. These advantages alone, however, don't mean that cable operators will emerge as the favored backhaul provider to wireless carriers. The industry must hit several moving targets in order to thrive in this demanding realm, said Jay Fausch, the director of cable MSO marketing for Alcatel Lucent (Euronext Paris and NYSE:ALU).

The key is to recognize that cellular backhaul is a far more exacting discipline than the already demanding commercial services business to which it is closely related. More specifically, the sensitivity of the data streams moving from the macro cell back toward carriers' core networks require quality of service (QoS) that cable operators haven't had to deliver before. The building blocks are in place, but the demands are great. "It is not as simple as tightening tolerances, but it is not a re-architecting," Fausch said. "Some networks elements must be changed out, but it is in no way, shape or form a total redo."

The second and third differences overlap and relate to two complex transitions through which the wireless industry is going. The first is the introduction of small cells. The great increase in traffic has led the industry to a creative solution. The idea is to insert femtocells, picocells and microcells between the macrocells and subscribers. Careful management enables the same spectrum to simultaneously be used by the macrocell and a small cell operating in a small slice of the same serving area. A side benefit is that small cells alleviate the industry's traditional problems with dead spots.

Internetworking these two layers would be difficult enough without a second, parallel transition. The first wave of the industry's rollout of 4G LTE has hit high gear. In this wave, LTE only is handling data. Voice, which is far more demanding, remains on 3G. The next phase, which will get under way in earnest during the next year, is the use of LTE for both voice and data. The voice element is called voice over LTE (VoLTE). This will make the entire landscape more efficient - and put more pressure on backhaul providers.

To some extent, cable operators are bystanders as the cellular industry wades through these changes. But they are bystanders with a tremendous amount at stake.

The bottom line is that the world of mobile backhaul is changing in real time as demands on cellular networks rapidly grow. Steve Hratko, the director of carrier marketing for Ruckus Wireless, sees the cable industry as a major player in the ecosystem that is forming. The industry has obvious advantages where it has aerial plant, which can support small cells.

The industry also has a long history of dealing with municipal authorities. This is an obvious asset to the cellular industry, which needs to find locations for the thousands of small cells it plans to deploy. "I think MSOs definitely are in a very good position," Hratko said. "I also see the tower and DAS [distributed antenna system] companies. These are the three types of companies I see as players for the deployment of large and small cells for MNOs. There may be others, but this is where I would start."

Carl Weinschenk is the Senior Editor of Broadband Technology Report. Contact him at

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