Whose profile is rising: Fiber-based wireless backhaul
With the ongoing drive by major wireless operators filling in gaps of their 3G and migrating to 4G LTE and WiMAX services, the need for higher speed wireless backhaul connections will be essential. During COMPTEL, incumbents (CenturyLink, Qwest and Verizon Global Wholesale), regional wholesale providers (Iris Networks, Palmettonet, and RCN Metro) and wireless backhaul specialists (TowerCloud, TTM, and FiberTower) showed off their wireless backhaul wholesale wares.
All of their efforts to target this burgeoning opportunity have paid off. One of the big highlights that took place, albeit the week after the show was over, was Verizon's announcement of its wireless backhaul partners for its ongoing LTE 4G wireless rollout.
Leading the effort was Verizon Global Wholesale which provided fiber to cell site connectivity for 3,500 of Verizon Wireless cell sites across 25 states.
And while the migration to fiber-based Ethernet will have an impact traditional TDM-based revenue, Quintin Lew, vp of marketing for Verizon Global Wholesale says it also "sees the bandwidth requirements going where they are today from 20 Mbps, 50 Mbps, 300 Mbps and 1 Gbps speeds, but we'll have the infrastructure to support whatever scale of expansion our customers are looking for."
No less compelling is Qwest Wholesale. While its voice revenues have continued to decline, Qwest has aggressively invested in fiber to the cell site infrastructure over the past year. In fact, Qwest said has requests to upgrade about 7,500 of the 17,000 cell sites with fiber capabilities that reside in its respective territories.
Incumbent carriers aren't the only ones present in the wireless backhaul game, however.
To fill in its wireless backhaul needs out of Verizon Communication's wireline region, Verizon Wireless has employed the help of various incumbent carriers (CenturyLink and Qwest) with fiber-based solutions as well as a group of regional wireline and wireless backhaul specialist players that will provide wireline-based fiber and even microwave solutions.
While Verizon Wireless' LTE rollout is the first major wireless backhaul push, other large mobile operators such as AT&T Mobility and T-Mobile have expressed similar needs for fiber-based wireless backhaul solutions.
Case in point is AT&T Mobility. In December, AT&T Mobility announced that it brought fiber to its cell sites in six of its markets to accommodate near-term HSPA backhaul needs. And like Verizon Wireless, AT&T will likely augment its fiber to the cell site deployments from its own AT&T Wholesale brother with solutions from competitive providers out of its wireline brother's network footprint.
As wireless operators expand their 3G and respective 4G coverage, it's not hard to imagine that the profile of fiber-based backhaul will continue to rise throughout 2010.
Whose profile is falling: TDM-based wireless backhaul
Copper-based T1 and TDM-based services still makes up the majority of the connections that go into cell sites, and will continue for some time, but the drive to richer wireless services will require much higher bandwidth than T1 access can provide.
Still, T1 access or TDM-based services aren't completely fading out of the picture. Some wireless operators actually will use a transitional TDM-based access service such as Ethernet over SONET.
Incumbent carriers Verizon Wholesale and Qwest not only will offer native Ethernet, but given the diversity of the particular cell site locations that exist with any wireless operator and preference, they are also selling Ethernet over SONET services.
Despite the burgeoning demand for fiber and Ethernet-based backhaul solutions, Verizon admits that while its Ethernet-IP services continue to rise it's coming at the cost of declining TDM service revenue, the company will still offer traditional T1 and SONET-based services to fill near-term needs.
"As Verizon Wireless and AT&T started to make statements about who has the best coverage, we stand to benefit from that very public bantering back and forth," said Quintin Lew, VP of marketing of Verizon Global Wholesale. "They continue to purchase wholesale services whether it be the Ethernet solutions that we're developing to deliver on that long-term strategy or if it's short-term just plug in gaps with T1s to cell sites."
And while EoSONET is other competitive providers (TowerCloud) believes that the better approach is to carry TDM-based traffic (T1 circuits) via pseudowires. Ron Mudry, CEO of Tower Cloud argues that using pseudowire is a more efficient than Ethernet over SONET to carry TDM traffic.
"We do provide T1 services as well and we'll use a pseudowire feature to do that so we can just allocate the amount of Ethernet capacity that's necessary for the T1 traffic that's there," Mudry said. "Obviously, most of the capacity now and going into the future will be Ethernet so we view a pure Ethernet play is important as opposed to an Ethernet over SONET approach that may cause you to strand capacity if you're having to serve both flavors at a cell site."
TDM-based backhaul services are certainly less fashionable, but they aren't going away anytime soon either.