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Small-cell backhaul report is now out. Read the press release below

Press Release
Compact, high-capacity links for less than $2,000 key to success of small cells

In small cell networks, backahul has become the main challenge in terms of costs and performance for mobile operators. For vendors, it is an opportunity to innovate and conquer a new market according to a new report from Senza Fili.

Seattle,WA, June 14, 2012 – Backhaul is crucial to the LTE small-cell business case. Traditional macro-cellular networks are unable to cope with rapid growth in traffic loads and are increasingly congested. Mobile operators agree that in dense urban areas small cells in heterogeneous networks (HetNet) can provide the capacity they need to meet the expectations of their smartphone, tablet and laptop data subscribers.

Yet without high-capacity, ultra-compact, low-cost backhaul to transport this traffic, the small-cell market will struggle to grow, according to a new report from Senza Fili, “Backhaul for small cells. Finding the right cost/performance tradeoffs to meet the backhaul challenge.

“Backhaul for small cells requires more than just re-purposing existing backhaul solutions. This is a new market for backhaul vendors – a big opportunity but also a big challenge as they strive to meet a very different set of requirements from what they are used to in the macro-cellular environment,” says Monica Paolini, the report’s author. Backhaul products for small cells are not only required to be smaller and cheaper, but they have to operate in more challenging RF environments.

No single solution will suffice, and operators will need to combine line-of-sight (LOS) and non-LOS (NLOS) technologies in their networks to provide the right mix of coverage and capacity, and to support a sustainable and scalable business case. Per-link costs of $2,000 with high capacity and extremely compact form factors are needed to close the business case, for both sub-6 GHz licensed and millimeter wave (60 GHz and e-band) spectrum – the two bands expected to dominate the small-cell backhaul market.

Based on a financial/TCO model and an extensive set of interviews with mobile operators and vendors, the report examines the tradeoffs in cost and performance that mobile operators face when choosing between LOS and NLOS options, between licensed and license-exempt spectrum, or between point-to-point (PTP) and point-to-multipoint (PMP) architectures, and provides an in-depth review of backhaul vendors’ plans to provide innovative solutions to this emerging market.

Among the findings of the report:
  • Fiber will be crucial to the success of small cells, but will be mostly used in aggregation points. At a $2,500/year lease price, fiber becomes more cost-effective than wireless. But in most markets lease prices are higher than this, and wireless backhaul is expected to be prevalent.
  • Backhaul costs for small-cells account for approximately twice as much of the TCO as they do in the macro-cell layer. This is why backhaul has become a major focus point for mobile operators planning small-cell networks.
  • Integrating backhaul within the small-cell enclosure allows operators to install one piece of equipment instead of two at the small-cell site, and allows operator to reduce their TCO by up to 27%. But it also reduces their flexibility in selecting solutions and vendors.
  • Backhaul sharing among operators is another way to keep small-cell costs down, allowing operators to save up to 20% of their TCO.

The report is available at www.senzafiliconsulting.com

Vendors mentioned in the report include Airspan, Alcatel-Lucent, Aviat, BLiNQ, Bluwan, BridgeWave, Cambridge Broadband Networks, Ceragon, DesignArt, Dragonwave, E-Band, Ericsson, Huawei, Intracom, NEC, Nokia-Siemens, Powerwave, Ruckus Wireless, Siklu, Skyfiber, Sub10, Taqua, Ubiquiti.
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