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Who would have thought that the growth of wireless services could be stymied by a wireline networking infrastructure?

Few will argue that wireless services are the fastest growing telecommunications segment globally, and this trend is projected to continue for some time, predominantly driven by new wireless data and multimedia services such as video streaming, multimedia messaging, online gaming and a variety of mobile broadband services. For example, a recent Yankee Group report projects that in 2005 alone, these services and applications will be generating more than $90 billion in revenue worldwide.* The same report also indicates that by 2008 wireless data revenues will be the single largest component of Telecom data revenue!

To capture this growing market and remain competitive, mobile operators are racing to unveil the latest wireless broadband technologies, such as CDMA, EV-DO, UMTS/HSDPA, OFDM, etc. In doing so, a common trend emerges regardless of which 3G, or perhaps “4G,” evolution path you’re on. All of these new services have two common traits. First, they all generate significant amounts of incremental bandwidth – ranging from hundreds of kilobits to several megabits per second. Second, the nature of the traffic they generate is IP, or data-oriented, as opposed to TDM voice or circuit-switched data. IP traffic is by its very nature dynamic both in terms of usage and bandwidth requirements, characteristics that are difficult to manage in a TDM-only environment, which is most often the case today.

This growth of IP traffic is significant in that it places a considerable strain on the traditional wireline infrastructure that wireless operators have been using for decades to backhaul traffic from their cell sites into their core networks. For wireless operators, this portion of their network is often referred to as the radio access network (RAN), and getting the traffic back into their network across the RAN is commonly referred to as RAN backhaul. What most folks don’t often stop to consider is that wireless networks have a significant dependency on wireline networking. In fact, once the radio traffic generated by mobile devices hits the nearest cell tower, or base station, the traffic is then transported over a mostly TDM based traditional leased line infrastructure. This TDM based RAN configuration has served providers well in the past in pre-3G, voice-dominated (non-IP), low-bandwidth environments, but is now under considerable strain to accommodate the growth of emerging 3G services. These underlying TDM-based access networks are in fact becoming both a bandwidth and economic bottleneck.

From a bandwidth perspective, consider the fact that in common 2G networks such as CDMA, 1xRTT, GSM, GPRS, etc., operators generally only require one or two T-1/E-1 leased lines for every wireless base station (cell site) location. The deployment of new 3G wireless services, however, generally leads to the initial introduction of two to four incremental T-1/E-1 lines, essentially doubling their access backhaul needs as a starting point, not even considering future growth requirements! Considering that large wireless operators may have 20,000 or more wireless base stations in their networks, the incremental cost of providing backhaul for new 3G services can be prohibitively expensive. Yankee Group indicates that more than one-third of the cost of cellular providers’ technical operations is in transmission, most of which is attributed to the backhaul portion of their networks.** Considering that technical operations constitute nearly one-third of total expenditures, the cost of this backhaul transmission alone is certainly significant.

Faced with the challenge to expand their wireless services and grow revenues while containing costs to maintain profitability, forward-thinking operators have began the migration to a packet-based backhaul network.

What better way is there to cost effectively manage wireless IP traffic than using a dynamic packet (ATM, IP/MPLS) based transport network? This migration trend for the most part started in Europe a few years ago as European operators were the first to deploy UMTS/WCDMA 3G services in mass, but has now caught on in Asia, and is gaining interest in the North American market where 3G services are taking flight.

In Europe for example, several wireless operators have deployed small multiservice switches at access aggregation points across their RAN to terminate both TDM E-1 and microwave links. From these points, the wireless traffic is then multiplexed onto higher-speed ATM links across the RAN and into their core locations, where the base station and network control equipment reside. Not only have these providers seen a reduction in leased access costs in the order of 20-35 percent—the primary objective of a packet migration in the first place—but they have realized further benefits that weren’t possible with traditional TDM backhaul alone. For instance, because multiservice switches support many services including IP, ATM, FR, etc., they were able to also consolidate the backhaul of pre-3G traffic—e.g., GSM and GPRS—onto the same packet network for greater efficiency and savings, and in doing so, eliminated the need for static TDM mux and cross-connects that were difficult to reconfigure and scale. In addition, by deploying a dynamic packet backhaul, they were able to improve the reliability of their RAN topology overall. RANs for the most part are configured in a hub-and-spoke design, with many single points of failure for each cell site. With a distributed packet backhaul that uses dynamic switching and routing, they were able to build in reroute protection mechanism that weren’t previously economical for each individual E-1 backhaul.

The experience gained in Europe is taking hold in other global regions. It’s true the access environment and wireless technology mix varies from country to county, especially here in the U.S where there are a diversity of both GSM and CDMA operators. However, the ability of packet-based backhaul solutions to overcome the access bottleneck, reduce costs, and improve scalability for growing 3G services, continues to gain traction.

Any wireless operator or wireline service provider supporting a TDM backhaul today and planning for 3G should take serious consideration of both the technical and economic benefits of a packet-based backhaul solution. The “wireline” bottleneck for wireless operators can be overcome with packet-based backhaul solutions.

Errol Binda is Senior Marketing Manager at Nortel.

Visit Nortel online.

Yankee Group citations: *Global Wireless/Mobile Forecast, Third Quarter 2004, The Yankee Group, 2004
**Cost Optimization of Wireless Backhaul for Next-Generation Migration, The Yankee Group, 2005