Up to the Challenge? Mobile Operators Look for New Business

Up to the Challenge? Mobile Operators Look for New Business

The mobile phone industry has been mature for some time. Around the world, most people who want and are able to use a cellular handset already have one—sometimes more than one. Even with innovations such as HSPA+, LTE and LTE-A becoming mainstream, average revenue per user (ARPU) continues to decline. Mobile operators may be at the crossroads. They are certainly at an inflection point. How to counter the trend is what operators must decide.

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More on E-band Backhaul: a Tale of Two Operators

Tight city spaces will need small E-band radios for microcell backhaul. Photo credit: La Citta Vita / Foter / CC BY-SA

Tight city spaces will need small E-band radios for microcell backhaul. Photo credit: La Citta Vita / Foter / CC BY-SA

The last time we were together, we discussed the prospects for urban backhaul in 2014. True, it will be a very exciting time in the 70 GHz and 80 GHz E-band frequencies. The promise of small cells is finally coming to fruition after the hype cycle had all but chewed and spit them out. Remember when you first heard of DSL and cable modem? By the time you could get one, the media had stopped talking about them for at least two years. But we’re digressing.

The point is that with cellular network subscribers actually able to connect to these microcell base stations, the need for a viable backhaul solution has come to a head. E-band to the rescue! And the need is not just with the established players to extend their mobile networks into the city cores backed by radio backhaul. By opening up the 70 and 80GHz frequencies to commercial backhaul applications, regulators have created an opportunity for new market entrants to move under the radar and grab share from the legacy carriers, who had previously discounted this spectrum.

With very aggressive pricing and novel tariffs that offer a bare minimum of 50 MB for data downloads and two hours of airtime for the equivalent of less than 3 dollars/month, as an example from Aviat research, a provider of mobile services such as these would need to be very creative capitalizing its backhaul requirements. As it turns out, on a per-link basis, an 80GHz nationwide backhaul license can be had for less than if the operator bought individual licenses everywhere it provides coverage—in one nation, in any event. At least, it would be true once a provider’s backhaul sites pass into four-figures territory.

Nonetheless, it’s a remarkable development made possible by the world shrinking figuratively and people living in closer quarters as never before. Brought to you by (the letter) E-band backhaul!

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4G World Poses Five Questions about Small Cell Backhaul

The Portage Lake Michigan shore looking across...

In Chicago, the waves on Lake Michigan were nearly as big as the controversy surrounding the topic of small cell backhaul at the 4G World show it hosted. (Photo credit: Pedco via Wikipedia)

4G World struggled a bit due to Hurricane Sandy, but went on as planned. Unfortunately, some speakers and attendees were not able to get to Chicago due to travel cancellations. I have to admit that watching surfers ride the big waves on Lake Michigan was an added bonus for the week!

Back at the show, small cell was the focus and backhaul was its No. 1 topic. Everyone has heard the concerns over technologies, costs, etc. The soapbox was available for anyone to jump on and espouse the potential benefits of their products. I believe that companies are selling their product capabilities, not addressing mobile operators’ real needs. Why? The biggest issue is that mobile operators, in most cases, really do not know what they need. The complexities of implementation are so diverse in small cell, that it is taking operators a long time to draw conclusions about their best path forward. Enter the fog of vendor technology pitches!

I believe that the real issues to be resolved center around implementation and OPEX control not technology. A few technologies could help, but they are not ready to provide the Carrier Class performance that the operators need. They will only have marginal effect on the final solution, in any event. What we need are answers to questions such as:

  • Who can climb which poles in the city and to what heights?
  • What are the power restrictions and cost of power on these poles?
  • What size enclosure is allowed to be on the poles and on the ground?
  • What are the aesthetic requirements for such an enclosure?
  • What attachment height is needed to architect the best network for both access and backhaul?

Most people think fiber is a slamdunk—that is not the case. You need to read the fine print and ask:

  • How plentiful are existing fiber onramps in the metro core area?
  • What’s the cost of putting a new onramp in place and stringing fiber from below street level up poles to small cells?
  • What piece of the action are municipalities going to demand for all this new telecom construction?

My recommendation: keep an eye on the technology evolution but focus on the real issues at hand. Partnerships with companies that have proven skills will be critical as these problems are best handled by a team of diverse thinkers. Look for ones that have a history in the business and have demonstrated innovation in all its facets. They are the partners who will get you through these very difficult problems.

Randy Jenkins
Director Business Development
Aviat Networks

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