Wireless Backhaul Optimization: A Market Waiting to Happen

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Wireless Backhaul Optimization:

A Market Waiting to Happen

Keith Mallinson EVP Research The Yankee Group kmallinson@yankeegroup.com

Backhaul Management
An OpEx Reduction Opportunity

Agenda
Wireless market overview Evolving backhaul requirements Service provider business model evolution Impact of wireless backhaul on service provider OPEX Technology solutions for improving wireless backhaul efficiencies Conclusions and recommendations

Backhaul Management
An OpEx Reduction Opportunity

2.5G/3G Migration: Technology Driven Acronym Chowder

GSM migration path 80% global market by 2007
GSM
2001

GPRS

2004

EDGE

WCDMA or UMTS

IS-136 TDMA

02 2001/
2001/02

CDMAOne migration path 18% global market by 2007

CDMA2000 1X WiDEN
2004

CDMAOne

2001/02

CDMA2000 1x EV DO CDMA2000 1x EV DV 300-600kbps

iDEN
Average Practical Data Rates (per user)

2004

?
40 - 180kbps

20-40kbps

Throughput estimates based on February 2004 commercial service offerings by U.S. carriers and confirmed by the Yankee Group as follows: Sprint PCS claims 50-70 kbps average with peak speeds up to 144 kbps for CDMA2000 1X; Verizon Wireless claims 40-60 kbps with bursts up to 144 kbps for CDMA2000 1X; AT&T Wireless claims 25-40 kbps average for GPRS and 100-130 kbps for EDGE (bursts up to 200). 5

Backhaul Management
An OpEx Reduction Opportunity

Implications of Technology Evolution on Wireless Backhaul Requirements

Wireless networks are becoming increasingly complex
GSM/EDGE overlaid with WCDMA TDMA overlaid with GSM/EDGE TDMA overlaid with CDMA2000 GSM overlaid with CDMA2000 (e.g. China Unicom)

Wireless network capacity requirements are increasing Networks are becoming increasingly extensive to include macro, micro and pico-cells

Backhaul Management
An OpEx Reduction Opportunity

Service Provider Business Evolution Mature Markets

Service providers have focused on rapid deployment and CAPEX minimization, with insufficient regard for OPEX
Transmission network design and optimization has been neglected Minimization of CAPEX has resulted inefficient designs from an OPEX perspective

Service providers in mature markets are becoming increasingly focused on OPEX For network overlays (e.g. WCDMA) OPEX management becomes more challenging
Service providers are paying a great deal of attention to the design and optimization of their transmission networks

Significant opportunities in mature markets for advanced transmission solutions

7

Backhaul Management
An OpEx Reduction Opportunity

Service Provider Operational Expenditures Create Opportunities for Backhaul

3% 15% 6% 13%

Total OPEX
29% 30% 34% 43% Field Maintenance and Product Support Technical Personnel Site Rental 7% Transmission Utilities Technical Operations Customer Care Cost of Goods Sold Marketing Sales and Admin 20%
8

Other

Backhaul Management
An OpEx Reduction Opportunity

Leased Line versus Microwave Transmission

Some operators use microwave transmission to reduce leased line expenses Microwave typically used by pure-play mobile operators in Europe Microwave rarely used in North America
10-15 percent of all transmission Consequence of tradition and focus towards lower CAPEX Difficult to transition because of existing lease obligations

Microwave used more extensively in emerging markets

Limited availability of robust landline infrastructure Leases are often particularly expensive

Backhaul Management
An OpEx Reduction Opportunity

Wireless Service Provider Business Analysis Emerging Markets

Greater focus towards minimizing both CAPEX and OPEX Benefit of green field (or near green-field) implementations Significant subscriber growth and deployment occurring Challenged by lack of supporting infrastructure (e.g. terrestrial transmission) Less tradition and greater receptivity to alternative network architectures

Emerging Markets represent a significant opportunity for advanced transmission solutions

10

Backhaul Management
An OpEx Reduction Opportunity

Technology Solutions for Optimizing Transmission

GSM GSM UMTS UMTS

GSM

UMTS

Grooming Grooming Packetization Consolidated transmission Optimized transmission

Independent transmission

11

Backhaul Management
An OpEx Reduction Opportunity

Business Case for Backhaul

Average monthly price per T1/E1 is $500 in US, EUR600 in Europe Average cell site has between 1 and 2 T1/E1s Upgrades such as EDGE and WCDMA create demand additional T1/E1s Operators planning a network overlay (EDGE or WCDMA) can expect more than 30 percent savings in back haul costs
Before Optimization 10,000 2.75 500 165.00 After Optimization 10,000 1.925 500 115.50 49.50

Number of sites Average T1/E1 per site (with overlay) Monthly lease cost per T1 Annual Lease Costs ($ million) Annual savings with Optimization ($ million)

12

Backhaul Management
An OpEx Reduction Opportunity

Conclusions and Recommendations

Wireless service providers business models are changing Network efficiency as opposed to speed of deployment becoming increasingly important Transmission networks in need of optimization solutions to reduce operational costs Service providers are retrofitting grooming and packetization solutions to optimize their transmission networks Expect more than 30 percent savings in transmission costs when optimization used for GSM/EDGE overlaid networks

13

Mobile Operator Considerations for Backhaul Deployment: Experience in Backhaul Opex Reduction Basilio Sadindi, Director of & Keith
Operations Pitout, Technical Director

Celtel, DRC Sadinidi.b@cd.celtel.com pitout.k@cd.celtel.com

Backhaul Management
An OpEx Reduction Opportunity

Backhaul Opex Reduction

DRC Experience with NMS AccessGate application

Celtel Network:
Currently 4 MSCs, 5 BSCs and 168 BTS sites Celtel are owner of fixed backhaul MW network. Completely Ericsson NSS and BSS network. Currently using 24 VSAT links for remote BTS installations over a vast geographic area.

Initial trial on one VSAT link Expanded to two more. Experiencing up to 50% reduction on capacity required over VSAT.

15

Backhaul Management
An OpEx Reduction Opportunity

Backhaul Opex Reduction

Operational Experience
Only in service for a few months. No degradation of speech quality experienced GSM Fax and Data fully functional over the link. Easy to set up and Operate. Stable and reliable. Currently in process of expanding to another 7 links Expecting a total of $250 000 per month on VSAT costs. Considering application over Microwave links.

16

Backhaul Management
An OpEx Reduction Opportunity

Backhaul Opex Reduction

Application Example

E1 cable IP LAN Ethernet cable

OAM Workstation with AccessView

3 E1 links (2 carry A.bis traffic)

1 E1 link (backhaul)

1 E1 link (backhaul)

3 E1 links (2 carry A.bis traffic)

Butembo Nord RBS

Cell side AccessGate

Satellite modem

Satellite modem

MSO side AccessGate

BSC

17

Ericsson Expander solutions

Backhaul Management
An OpEx Reduction Opportunity

What if the most cost-efficient alternative available comes at a price of 10.000 per E1 per month?

Transmission 77.6%

What can be done?

19

Backhaul Management
An OpEx Reduction Opportunity

Standard BSS RAN Solution

Circuit-Switched RBS/ BTS
Standard A A+-interface Signaling /E1

B sub

A sub
Standard A

BSC & Server

MSC & Server

RBS/ BTS RBS/ BTS A sub RBS/ BTS

Standard A

B sub

Call routing of a PLMN-PSTN call: Via the BSC and MSC 16 kbps on the PCM Circuit-switched Abis Transmission TS allocated to every Basic Channel in TRU Std: 10 TRU per E1 or 8 TRU per T1 LAPD-C: +2030% capacity/Abis LAPD-M: +3050% capacity/Abis

20

Backhaul Management
An OpEx Reduction Opportunity

The Layered Network Architecture !!

Each layer can grow independently Control
Centralized location of servers reduces O&M cost Independent of transport technology
End-user applications

MSC

HLR

GMSC/Transit SG

Connectivity
Same transport for all services Free choice of transmission technology Distributed MGws enables transmission savings Enables transport of coded voice Pooled media stream resources
21 SGSN WCDMA Access MGW GSM/ EDGE Access

Control
GGSN

Connectivity
MGW

PSTN ISDN

Internet Intranet

Backhaul Management
An OpEx Reduction Opportunity

Other Transmission-Saving Functionality

1) Bandwidth optimization
Silent call suppression, 3050% savings on CS Flexible Abis, up to 30% savings on packet switched AMR subrate switching, 50% savings on CS

2) IP Abis
3050% lower cost per Mb over Abis (xDSL, Ethernet vs. E1/T1) Bandwidth optimization possible on top of this

3) Local switching
Additional 2050% savings on top of bandwidth optimization

22

Backhaul Management
An OpEx Reduction Opportunity

The Silent Call Suppression Solutions

RBS/ BTS
Standard A

Circuit-Switched

A+-interface Signaling /E1

One box handles 8 E1

RBS/ BTS Supression
Box Silent Call

Silent Call Supression Box

BSC & Server

MSC & Server

RBS/ BTS RBS/ BTS

Saving: Discontinous transmission Saving up to 50% NW impact: HW: NMS AccessGate SW: BSS

23

Backhaul Management
An OpEx Reduction Opportunity

AMR Subrate Switching

Circuit-Switched RBS/ BTS
Standard A A+-interface Signaling /E1

BSC & Server

Standard A

MSC & Server

RBS/
16 TS k

BTS RBS/ BTS A sub RBS/ BTS

Standard A

B sub

AMR subrate switching over Abis: Subs are ordered to AMR 7.15 kbps Two subs can be squeezed into every 16kb Abis TS Savings: +50% on Abis AMR mobiles needed

AMR 7.15

AMR 7.15

24

Backhaul Management
An OpEx Reduction Opportunity

The IP Solution
Circuit-Switched RBS/ BTS
Standard A A+-interface Signaling /E1

BSC & Server

IP Support

MSC & Server

RBS/ BTS RBS/ BTS

IP Support IP Support

IP GSM Radio Access

Packet-Switched Abis Dimension transmission links based on peak traffic over link HW: IP switch card added SW: BSS

RBS/ BTS
IP Support

25

Thank You!

Wireless Backhaul Technologies

Backhaul Management
An OpEx Reduction Opportunity

Wireless Backhaul Today GSM Network Characteristics

Large number of geographically-dispersed cell sites One or more E1/T1s per cell site inefficiently utilized New technology deployments require additional, separate, E1/T1 facilities

BSC E1/T1s x n
GSM/ GPRS/ EDGE CDMA TDMA UMTS
28

TRAU E1/T1s x n A.ter E1/T1s x n A interface

MSC

A.bis 2G/3G Wireless Backhaul

Backhaul Management
An OpEx Reduction Opportunity

Early Backhaul Optimization

BSC

Groomer

TDM groomers save unused DS0s

Simple approach No statistical multiplexing No help for Abis inefficiencies

29

Backhaul Management
An OpEx Reduction Opportunity

3G Backhaul The Vision

BSC

ATM SW RNC

ATM SW ATM SW

2G & 3G traffic combined on ATM backhaul

Statistical multiplexing gain; may avoid stranded DS0s No help with Abis inefficiencies; Adds ATM cell tax Will be superceded by IP backhaul, eventually

30

Backhaul Management
An OpEx Reduction Opportunity

Typical GSM A.bis on E1

16 kbps TRAU channels, occupied even during silence

Unused DSOs

Multiple lightly loaded signaling channels

31

Backhaul Management
An OpEx Reduction Opportunity

GSM 2G

Before Optimization
BTS MW/Fiber

2 T1/E1s A.bis
BTS 13 TRX

3 T1/E1s A.bis
BTS 22 TRX

5 T1/E1s Total
BSC Central Office

32

Backhaul Management
An OpEx Reduction Opportunity

Backhaul Optimizations
Eliminate traffic from
Call inactivity Voice silence periods Other TRAU idle frames GPRS & EDGE idle PCU frames

Multiplex signaling channels Recover stranded timeslots (TDM grooming) Handle other cell site traffic
Location measurement unit IP links for other remote third-party equipment

33

MW/Fiber

3 T1/E1s A.bis

BTS

BTS 22 TRX
SPAN 2

Poli cyP oint

3:2 Savings

10/100 ETHERNET

SPAN 1

With Optimization

SYST EM F AUL T

CONSOL E

ACT LI NK /

SPEED ACT LI NK / SPEED

RS 232

Et hernet 1 2 Faul t Standby O k

1 3 5 7

Activit y 100 M b NM S NM S 2 4 6 8

Access Gate

RS 232

Et hernet 1 2 Faul t Standby O k

1 3 5 7

Activit y 100 M b NM S NM S 2 4 6 8

Access Gate

RS 232

Et hernet 1 2 Faul t Standby O k

1 3 5 7

Activit y 100 M b NMS NMS 2 4 6 8

Access Gate

RS 232

Et hernet 1 2 Faul t Standby O k

1 3 5 7

Activit y 100 M b NM S NM S 2 4 6 8

Access Gate

RS 232

Et hernet 1 2 Faul t Standby O k

1 3 5 7

Activit y 100 M b NM S NM S 2 4 6 8

Access Gate

RS 232

Et hernet 1 2 Faul t Standby O k

1 3 5 7

Activit y 100 M b NMS NMS 2 4 6 8

Access Gate

RS 232

Et hernet 1 2 Faul t Standby O k

1 3 5 7

Activit y 100 M b NM S NM S 2 4 6 8

Access Gate

RS 232

Et hernet 1 2 Faul t Standby O k

1 3 5 7

Activit y 100 M b NMS NMS 2 4 6 8

Access Gate

RS 232

Et hernet 1 2 Faul t Standby O k

1 3 5 7

Activit y 100 M b NMS NMS 2 4 6 8

Access Gate

RS 232

Et hernet 1 2 Faul t Standby O k

1 3 5 7

Activit y 100 M b NM S NM S 2 4 6 8

Access Gate

RS 232

Et hernet 1 2 Faul t Standby O k

1 3 5 7

Activit y 100 M b NMS NMS 2 4 6 8

Access Gate

RS 232

Et hernet 1 2 Faul t Standby O k

1 3 5 7

Activit y 100 M b NMS NMS 2 4 6 8

RS 232

Access Gate

Et hernet 1 2 1 3 5 7 Faul t Standby O k Activit y 100 M b

Access Gate

2 4 6 8
RS 232

Et hernet 1 2 1 3 5 7 Faul t Standby O k Activit y 100 M b

Access Gate

2 4 6 8
RS 232

Et hernet 1 2 1 3 5 7 Faul t Standby O k Activit y 100 M b

Access Gate

2 4 6 8
RS 232

Et hernet 1 2 1 3 5 7 Faul t Standby O k Activit y 100 M b

Access Gate

2 4 6 8
RS 232

Et hernet 1 2 1 3 5 7 Faul t Standby O k Activit y 100 M b

Access Gate

2 4 6 8
RS 232

Et hernet 1 2 1 3 5 7 Faul t Standby O k Activit y 100 M b

Access Gate

2 4 6 8 TX RX TX RX
11 13 15 17 19 21 23 25 1 3 5 7 9

SYST EM F AUL T

CONSOL E

ACT LI NK /

SPEED ACT LI NK / SPEED 10 12 14 16 18 20 22 24 26 2 4 6 8

Central Office
TX TX RX CompactPCI
CPC 4400 24+2 SWI TCH PORT 25 PORT 26

2 T1/E1s Eliminated

MGMT PORT

Access Gate CPCI Chassis (Incl Mgmnt, Eth Switches)

10

12

14

16

18

20

22

24

26

RX

11

13

15

17

19

21

23

25

NM S

NMS

NMS

NM S

CompactPCI

CPC 4400 24+2 SWI TCH

PORT 25

2 T1/E1s A.bis

Backhaul Management

An OpEx Reduction Opportunity

BTS 13 TRX

10/100 ETHERNET

SPAN 1

SPAN 2

Poli cyP oint

2:1 Savings

34

Chassis Shelf Controler

PORT 26

Chassis Shelf Controler

MGMT PORT

BSC

NM S NM S NMS NM S NM S NMS NM S

NM S

Backhaul Management
An OpEx Reduction Opportunity

Stringent Requirements
Radio vendor inter-op certification
Vendor-specific interface issues are time consuming, but critical for successful deployment

Minimum added end-to-end latency

10 ms or more added delay has unacceptable impact on voice quality

Automatic payload analysis

Critical to avoid manual provisioning of timeslot assignments

Minimum footprint
Typically must fit within existing BTS cabinet

35

MW/Fiber

BTS 22 TRX

4 T1/E1s A.bis

EDGE & Expansion

EDGE is introduced into the network Overall GSM traffic increase

5:3 Savings

SPAN 1 SPAN 1 10/100 ETHERNET 10/100 ETHERNET

SYST EM F AUL T

CONSOL E

ACT LI NK /

SPEED ACT LI NK / SPEED

RS 232

Et hernet 1 2 Faul t Standby O k

1 3 5 7

Activit y 100 M b NM S NM S 2 4 6 8

Access Gate

RS 232

Et hernet 1 2 Faul t Standby O k

1 3 5 7

Activit y 100 M b NM S NM S 2 4 6 8

Access Gate

RS 232

Et hernet 1 2 Faul t Standby O k

1 3 5 7

Activit y 100 M b NMS NMS 2 4 6 8

Access Gate

RS 232

Et hernet 1 2 Faul t Standby O k

1 3 5 7

Activit y 100 M b NM S NM S 2 4 6 8

Access Gate

RS 232

Et hernet 1 2 Faul t Standby O k

1 3 5 7

Activit y 100 M b NM S NM S 2 4 6 8

Access Gate

RS 232

Et hernet 1 2 Faul t Standby O k

1 3 5 7

Activit y 100 M b NMS NMS 2 4 6 8

Access Gate

RS 232

Et hernet 1 2 Faul t Standby O k

1 3 5 7

Activit y 100 M b NM S NM S 2 4 6 8

Access Gate

RS 232

Et hernet 1 2 Faul t Standby O k

1 3 5 7

Activit y 100 M b NMS NMS 2 4 6 8

Access Gate

RS 232

Et hernet 1 2 Faul t Standby O k

1 3 5 7

Activit y 100 M b NMS NMS 2 4 6 8

Access Gate

RS 232

Et hernet 1 2 Faul t Standby O k

1 3 5 7

Activit y 100 M b NM S NM S 2 4 6 8

Access Gate

RS 232

Et hernet 1 2 Faul t Standby O k

1 3 5 7

Activit y 100 M b NMS NMS 2 4 6 8

Access Gate

RS 232

Et hernet 1 2 Faul t Standby O k

1 3 5 7

Activit y 100 M b NMS NMS 2 4 6 8

RS 232

Access Gate

Et hernet 1 2 1 3 5 7 Faul t Standby O k Activit y 100 M b

Access Gate

2 4 6 8
RS 232

Et hernet 1 2 1 3 5 7 Faul t Standby O k Activit y 100 M b

Access Gate

2 4 6 8
RS 232

Et hernet 1 2 1 3 5 7 Faul t Standby O k Activit y 100 M b

Access Gate

2 4 6 8
RS 232

Et hernet 1 2 1 3 5 7 Faul t Standby O k Activit y 100 M b

Access Gate

2 4 6 8
RS 232

Et hernet 1 2 1 3 5 7 Faul t Standby O k Activit y 100 M b

Access Gate

2 4 6 8
RS 232

Et hernet 1 2 1 3 5 7 Faul t Standby O k Activit y 100 M b

Access Gate

2 4 6 8 TX RX TX RX
11 13 15 17 19 21 23 25 1 3 5 7 9

SYST EM F AUL T

CONSOL E

ACT LI NK /

SPEED ACT LI NK / SPEED 10 12 14 16 18 20 22 24 26 2 4 6 8

Central Office
TX TX RX CompactPCI
CPC 4400 24+2 SWI TCH PORT 25 PORT 26

4 T1/E1s Eliminated

MGMT PORT

Access Gate CPCI Chassis (Incl Mgmnt, Eth Switches)

10

12

14

16

18

20

22

24

26

RX

11

13

15

17

19

21

23

25

NM S

NMS

NMS

NM S

CompactPCI

CPC 4400 24+2 SWI TCH

PORT 25

3 T1/E1s A.bis

3 T1/E1s BTS A.bis

13 TRX

10/100 ETHERNET

SPAN 1

SPAN 2

Poli cyP oint

Backhaul Management

An OpEx Reduction Opportunity

1 T1/E1 EDGE

4:2 Savings

36

Chassis Shelf Controler

PORT 26

Chassis Shelf Controler

MGMT PORT

BSC

NM S

NM S

NMS

NM S

NM S

NMS

NM S

NM S

Note: The TRX numbers are calculated for T1s

BTS

SPAN 2 SPAN 2

Poli Poli cyP cyP oint oint

1 T1/E1 EDGE

Backhaul Management
An OpEx Reduction Opportunity

UMTS Support
Remove non-active cells from the ATM Pool/multiplex UMTS traffic over the common backhaul
Avoid inefficient ATM circuit emulation More efficient than any ATM over fractional E1

2G BTS

2 T1/E1s A.bis
10/100 ETHERNET SPAN 1 SPAN 2 10/100 ETHERNET SPAN 1 SPAN 2

2 T1/E1s A.bis
Poli cyP oint Poli cyP oint

2G BTS

Cell Site
3G Node B

Cell Site
3G Node B

T1/E1 Iub RNC

ATM RANAP Gateway TDM

BSC
A interface

MSC

Central Office
37

Backhaul Management
An OpEx Reduction Opportunity

Evolution to IP Backhaul
2G & 2.5G optimizations are still required
ROP* over IP

IP Network
Router Router
2G BTS 2 T1/E1s A.bis
10/100 ETHERNET SPAN 1 SPAN 2

Cell Site
3G Node B

Poli cyP oint

ROP* over IP w/HC** over T1/E1

RNC
* ROP RAN Optimized Protocol ** HC IP Header Compression
ATM

BSC
A interface

Mobile Switching Facilities

38

Backhaul Management
An OpEx Reduction Opportunity

Backhaul Optimization
Reduce operating expenses
Backhaul can be 30% of OpEx

Save Money Support New Services

Provide new services and/or new capacity with limited or existing backhaul capacity

39

Wireless Backhaul Technologies

Q&A

For more information.

Contact:
Keith Mallinson, The Yankee Group, kmallinson@yankeegroup.com Basilio Sadindi, Celtel, sadindi.b@cd.celtel.com Martin Bckstrm, Ericsson, martin.backstrom@ericsson.com Brough Turner, NMS Communications, brough_turner@nmss.com

THANK YOU!