Mobile operators risk backhaul gap in LTE networks

Mobile operators are adopting LTE at rates even faster than 2G and 3G. As operators race to stay ahead of mobile data demand, LTE is one key to the future.

Tellabs commissioned a new study by industry analyst Strategy Analytics on LTE mobile backhaul. The findings were surprising – and alarming.

If operators continue to invest in mobile backhaul for LTE at the same rates as they did for 2G and 3G – about 17.5% of the total cost of ownership – they risk falling short of user demand. Far short: about $9.2 billion short on investment, and 16 petabytes short on worldwide capacity by the year 2017. The problem will be most acute in Asia-Pacific markets, but it will be pronounced around the world.

That “backhaul gap” will lead to customer churn. Up to half of network performance problems for mobile operators stem from backhaul networks.

“As many as 40% of mobile users list poor network performance as a reason for leaving an operator,” said Sue Rudd, director-service provider analysis at Strategy Analytics and the lead analyst on the study. In a video, she expands on her analysis of the backhaul gap.

More important, there’s an opportunity for mobile operators to differentiate themselves from competitors by investing enough in backhaul. For each $1 that operators invest above the 17.5% that is now planned, operators can save up to $4 in revenue that would otherwise be lost. If their competitors don’t make parallel investments to keep up, you can gain a sustainable competitive advantage.

To learn more about the study, come visit Tellabs at Mobile World Congress, Hall 6, Stand 6E10 at Fira Gran Via, Barcelona, Feb. 25-28. We will demonstrate our work in self-optimizing networks (SON) and small cells, showing how technicians can use an iPad to save time as they deploy small cells and macro cells.  We also will show a new software-defined networking (SDN) application that controls congestion in mobile backhaul networks. I hope to see you there!

Subjects: LTE, Mobile Backhaul, Mobile
Comments:
This seriously underestimates the backhaul required. The bulk of data traffic is already bypassing cellular entirely and this 'hidden" zetabyte backhaul load is easily many, many times the numbers mentioned.
Francis McInerney — February 25, 2013 10:26 AM
Hi Francis - Good point. The demand for backhaul is huge also on fixed side of the network and many mobile users actually use those networks with WiFi-offload. Our focus in this study was however in pure LTE play.
Tuuli Sarvilinna — March 5, 2013 9:15 AM