In late January and into February 2016, a big tumult ensued when Sprint announced that it would begin to move its mobile backhaul strategy from one based on leased fiber to another based on owned microwave radio. The story first ran in technology news site Re/code and quickly got reposted with additional commentary by FierceWireless, Wireless Week and others, and which was reiterated this week in RCR Wireless.
While the breathtaking headlines about reducing costs by $1 billion caught most people’s attention—primarily through reducing tower leasing costs and not using competitors’ networks—lower down in the copy came a potent reminder from Sprint about the economic benefits of microwave radio. It also highlighted the fact that backhaul has entered a transitional period (see article end for more on that).
Most of that $1 billion that Sprint seeks to save comes by way of moving away from AT&T and Verizon fiber backhaul networks. You might think that Sprint would build its own fiber network instead. But that would take too long and still have an exorbitant price tag associated with it. It’s a function of both out-of-pocket capital costs and embedded lost opportunity costs. Bottom line: laying fiber connections is expensive and slow. Putting up a network of high-speed, broadband microwave relay towers is quicker and easier. Continue reading