By Gavin Patterson

The recent backhaul deal announced by BT with T-Mobile and 3 has highlighted how technology deployments such as HSPA and the phenomenal growth in mobile broadband traffic have shifted network bottlenecks upstream from the radio interface to the backhaul network.

Flat-rate mobile data tariffs are driving data usage, and data traffic per site has jumped significantly because of the addition of IP applications. Feedback from operators that have launched mobile broadband services shows that users are staying longer on data calls and are downloading very large files, which has placed a significant strain on backhaul.

“Two years ago, there was almost no activity in [backhaul], and now it’s the most popular option, and everyone’s doing it,” says Gabriel Junowicz, director of business development at RAD, a manufacturer of network-access equipment for data-communications and telecoms applications. “HSDPA changed the game because mobile broadband competes with fixed solutions, and so HSDPA had to compete on price as well as bandwidth.”

Legacy backhaul networks were built largely to handle voice services and are almost incapable of supporting the wireless bandwidth promised by operators for widespread HSPA usage. Although many 2.5G base stations needed backhaul speeds of only about 6Mbps, 3G services have upped the requirement to 45Mbps, while LTE requirements will jump towards 300Mbps.

In addition, operators that roll out 4G networks alongside existing infrastructure will need to layer air-access technologies at each cell site, further burdening backhaul networks.

Not surprising then that T-Mobile and 3 signed a five-year deal on October 6 for the provision of backhaul services for 7,500 base stations on their shared 3G infrastructure over BT’s 21st-century network. BT is currently migrating its common backhaul network to Ethernet technology throughout the UK with the aim of offering backhaul speeds of up to 60Mbps.

The deal will help Mobile Broadband Network (MBNL), the network-sharing joint venture between T-Mobile and 3 UK, pursue its aim of establishing the UK’s most extensive 3G network by 2010, at a time when both operators are experiencing strong growth in mobile broadband and other mobile data services. The MBNL deal replaces a similar contract signed between BT and T-Mobile in July, which was estimated to “potentially” provide cost savings worth several hundred million pounds in the following five years.

BT’s 21CN now supports backhaul for four of the five mobile network operators in the UK after the carrier signed similar five-year deals with Vodafone in April this year and O2 the following month. Vodafone estimated that backhaul would account for 32% of its total network capital expenditure in 2007 and 2008, with radio access accounting for a further 48%.

At the time of the BT announcement, Vodafone’s Mark Street told Informa Telecoms & Media that it was difficult to estimate exact cost savings, but said there would be no associated software or hardware costs. Vodafone also has a 3G-network-sharing deal with Orange, signed in February 2007, although Orange has so far not agreed a backhaul deal with BT.

France Telecom, which owns and operates the Orange brand, is reportedly planning a “significant upgrade” to its fixed-broadband backhaul capabilities in France, and has already spoken to a number of equipment vendors about installing aggregation boxes to backhaul broadband traffic from multiple local exchanges to bigger metro networks via a single fibre. Similar aggregations are likely to be enacted in other countries served by the Orange brand, including Poland, Spain and the UK.

Backhaul requirements are changing, and mobile operators worldwide have announced diverse backhaul solutions. In the US, Sprint Nextel plans to use Ciena’s carrier-Ethernet platform for backhaul in its Xohm WiMAX network in Baltimore and Chicago, but is also using Dragonwave’s microwave system for some Xohm backhaul applications. T-Mobile USA has also signed several agreements for fibre-based backhaul for the operator’s new HSPA cell sites.

In Portugal, Vodafone has tapped Brilliant Telecommunications to supply a system for its live IP-based mobile backhaul network, as the operator migrates its backhaul infrastructure from traditional leased lines to Ethernet. “Although the migration to Ethernet allows us to achieve considerable cost savings, it also poses the challenge of ensuring synchronisation to our base-station sites,” said Miguel Martins, CTO of Vodafone Portugal.

Even for smaller operators, such as Singapore’s MobileOne, potential savings are attractive. The operator reported that its 2007 capex would be at the high end of the predicted S$72-100 million (US$49-68 million), because it would spend more on building backhaul systems to avoid paying leased-line costs to Singapore Telecom of more than S$30 million or so a year.