Packet Backhaul: Carrier Strategies & Real-World Deployments
The need for mobile backhaul networks to undergo the same circuit-to-packet transition that is underway throughout the wireline network and in the core of mobile networks is well understood. With the rollout of mobile broadband standards such as High Speed Packet Access (HSPA) and Evolution-Data Optimized (EVDO), and with Long Term Evolution (LTE) expected to be commercially deployed in volume within three years, time-division multiplexing (TDM) circuits no longer provide the capacity, flexibility, and crucially, the cost-per-bit metrics that are needed to enable the mobile industry to make a profitable transition from a voice-dominated business model to a data-dominated business model.
Carriers have been experimenting with different packet backhaul solutions for three or four years now. But with HSPA and EVDO usage driving mobile broadband traffic volumes to increase by a factor of ten year-over-year in many cases, there is an urgent need for real-world insight into just how much real progress carriers – and by implication, their vendor suppliers – are making in executing on this transition. 
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Yankee Group forecasts that mobile traffic will have a CAGR of 130 percent from 2008 through 2012—that is, 1 MB of traffic in 2008 will equal 28 MB of traffic in 2012. However, volume is just the first of the five major changes we are seeing on the mobile network. The second is more of a challenge than a change in the 2009 network: As we move toward 4G/LTE, the mobile network must meet the performance, quality of service and resiliency requirements of a converged, voice and data network. Third, mobile data traffic is becoming more truly mobile. By 2012 more than 55 percent of the traffic will be coming from smartphones or the “advanced OS” category of mobile devices, i.e., the traffic is becoming more mobile and less nomadic. Fourth, the traffic is becoming more critical. We are conducting more work and running more applications over the mobile network and the percentage of voice cord cutters—those users who have canceled their land line and rely only on mobile phones—is increasing. And fifth, ARPU is stagnating. The growth in data revenue is slowing and, together with declining voice revenue, does not compensate for the meteoric rise in data traffic.

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CAPEX and Lease Revenue Opportunities for Carrier Ethernet, Microwave, MPLS-TE, PBB-TE, TDM, and Cable Backhaul Solutions
Ethernet is the layer 2 technology choice for backhaul whether it is delivered over microwave, fiber, or copper. Efforts by organizations such as the Metro Ethernet Forum strengthen operators’ confidence in Ethernet as a carrier class backhaul technology. By 2014, microwave backhaul penetration will increase in several markets but operators will switch from PDH microwave to high capacity Ethernet microwave solutions. Ethernet over fiber will gain significant traction in developed markets such as North America and some Asian countries, as operators upgrade their backhaul networks to meet the capacity demands of 3G and 4G traffic. Growing mobile capacity demands, reliability, and low-cost solutions are key factors for mobile backhaul evolution.

This study provides a comprehensive analysis of the global mobile backhaul market and provides insight into the opportunities and trends it presents. Market segmented data is provided to show the similarities and differences by region and technologies. ABI Research data shows that T1/E1 is still the dominant backhaul technology in markets such as Latin America, North America, and Eastern Europe. However by 2014, the use of T1/E1 for backhaul will disappear in most markets and will be significantly reduced in the rest.