IP Ethernet in Mobile Backhaul Infrastructure

IP Ethernet in Mobile Backhaul

Infrastructure

San Jose, CA

Thursday, 24 June, Track II, Infrastructure & Technology Trends

Presented by

Michael HowardCo-founder and Principal Analyst, Carrier and Data Center Networking

Infonetics Research

Copyright © 2010 Infonetics Research, Inc. 2

Today’s Speaker

Michael Howard

Principal Analyst and Co-founder

Copyright © 2010 Infonetics Research, Inc. 3

The Ethernet market is moving

• Providers are investing in Ethernet equipment

– 2009: $22 billion

– 2014: $32 billion

– Cumulative US$149 billion between 2010 and 2014

– Routers, CE Switches, Ethernet over SDH/SONET and

WDM, Ethernet microwave, EPON, VDSL, EADs

• $Billions of Ethernet services revenue worldwide

– 2009: $21 billion

– 2014: $39 billion

Copyright © 2010 Infonetics Research, Inc. 4

What is mobile cell site backhaul?

Network between the BTS/NodeBs at a cell site to the BSC/RNC site,

whether over air, copper, or fiber

1st Mile (LRAN) 2nd Mile (HRAN)

NodeB

eNodeB

BTS

RNC/BSC

RNC/BSC

RNC/BSC

HUB

RNC/BSC siteCell site

1st Mile (LRAN) 2nd Mile (HRAN)

NodeB

eNodeB

BTS

RNC/BSC

RNC/BSC

RNC/BSC

HUB

RNC/BSC siteCell site

Copyright © 2010 Infonetics Research, Inc. 5

3 stages of IP/Ethernet backhaul to LTE

IP/Ethernet backhaul solves ARPU-traffic disconnect today and backhaul

problem for HSPA today…and LTE tomorrow

2G BTS

3G NodeB

E1/T1

RNC

BSCPDH

Backhaul

2G BTS

3G NodeB

E1/T1

RNC

BSC

Hybrid/Dual

Backhaul

2G BTS

3G NodeB

RNC

BSC

All

IP/Ethernet

Ethernet

Ethernet

InternetGateway

LTE eNodeB

2G BTS

3G NodeB

E1/T1E1/T1

RNC

BSCPDH

Backhaul

PDH

Backhaul

2G BTS

3G NodeB

E1/T1E1/T1

RNC

BSC

Hybrid/Dual

Backhaul

Hybrid/Dual

Backhaul

2G BTS

3G NodeB

RNC

BSC

All

IP/Ethernet

All

IP/Ethernet

Ethernet

Ethernet

InternetGateway

LTE eNodeB

Copyright © 2010 Infonetics Research, Inc. 6

Cell site backhaul connections increase quickly

• 2010-2014 new: ~1.4 billion mobile subs, ~1.2 billion mobile broadband subs

– More base stations, cell site connections (and equipment for each), higher backhaul capacities

• Connections and bandwidth per connection drive equipment spendingSource: Infonetics Research Mobile Backhaul Equipment and Services, April 2010

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Co

nn

ec

tio

ns

(K

)

CY08 CY09 CY10 CY11 CY12 CY13 CY14

Worldwide Mobile Backhaul Connections : Installed vs New

Installed Connections

New Connections

Copyright © 2010 Infonetics Research, Inc. 7

…And data dramatically increases traffic load

Operators increasing capacities via EDGE, EV-DO, HSPA, WiMAX, LTE

…..But flat to slow ARPU changes

0

10

20

30

40TB

Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09

JRA 09.09.2009

0

10

20

30

40TB

Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09

JRA 09.09.2009

Live network KPI data

Operators: 9 Europe, 4 APAC, 6 Americas

Average Y-Y growth over 500%

Total HSDPA Traffic per Day

Source: Nokia Siemens Networks

Copyright © 2010 Infonetics Research, Inc. 8

Costs drive operators to IP/Ethernet backhaul

• Costs based on backhaul capacities required by technology, and MRCs for services

• Ethernet offers huge drop in cost-per-bit of bandwidth that almost matches the 2x to 10x traffic increases HSPA delivers

• IP/Ethernet naturally fits WiMAX and LTE as well

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

CY08 CY09 CY10 CY11 CY12 CY13 CY14

PDM and ATM over PDH Ethernet fiber and copper

…or move to

Ethernet

Stay on TDM

Source: Infonetics Research Mobile Backhaul Equipment and Services, April 2010

Copyright © 2010 Infonetics Research, Inc. 9

New cell site connections go Ethernet

New connections move quickly to mostly IP/Ethernet, whether

fiber, copper or air

Worldwide Mobile Backhaul New Connections by Technology

-400

-200

0

200

400

600

800

1,000

1,200

1,400

1,600

CY08 CY09 CY10 CY11 CY12 CY13 CY14

Nu

mb

er

of

New

Co

nn

ecti

on

s (

Th

ou

san

ds)

PDH ATM over PDH

Ethernet copper Ethernet fiber

SONET/SDH and WDM Microwave-Ethernet and dual TDM/Ethernet

Microwave-TDM Other

Source: Infonetics Research Mobile Backhaul Equipment and Services, April 2010

Ethernet

Copyright © 2010 Infonetics Research, Inc. 10

• Ethernet solidly in operator MBH strategies

– Majority plan dual/hybrid approach

– Predict 50 operators will be committed to single IP/Ethernet

backhaul (were 25 at end 2009)

– LTE planning drives more Ethernet

• Mobile broadband growth continues to drive traffic and costs

• Cellsites not fiberized fast enough—opportunity for

microwave and copper

• New Ethernet chipsets include MBH functions: 1588v2,

SynchE, Eth OAM

Mobile backhaul 2010 issues

Copyright © 2010 Infonetics Research, Inc. 11

Summary

• Backhaul costs are the principal driver, due to traffic growth

• Operators are making the investment to move to the

IP/Ethernet backhaul networks

• IP/Ethernet backhaul

– Solves ARPU-traffic disconnect today

– Solves backhaul problem for HSPA today

– …and LTE tomorrow

Thank You

Michael Howard

Co-founder and Principal Analyst, Carrier and Data Center Networks

Infonetics Research

+1 408.583.3351

[email protected]

www.infonetics.com