There will be 1.8 million mobile cell sites connected directly by optical fiber backhaul in 2014, according to NPD In-Stat. That explains why so many fixed network service providers are focusing on mobile backhaul services. For many cable operators and rural telcos, mobile backhaul is among the biggest near term revenue opportunities. For Cox Communications, mobile backhaul is among the top five potential business-focused revenue opportunities, for example.
But mobile service providers may not have either the money or the time to move to fiber for backhaul, and even if they have the money, fiber facilities might be available where they need it, argues Monica Paolini, owner of Senza Fili Consulting.
A solution, she argues, is to use wireless backhaul first, then gradually transition to fiber as facilities are available and as bandwidth needs require fiber.
Wireless backhaul requires a higher initial expenditure than leased fiber, but subsequent operating expense is lower. This makes wireless backhaul a more expensive solution than leased fiber in the first year, in developed markets.
After the break-even point in the second year, though, wireless backhaul costs less. In the emerging market scenario, wireless backhaul is the lowest-cost solution from the start, a white paper suggests.
In a developed market, wireless backhaul can save mobile operators 26 percent over leased fiber, and 42 percent over built fiber over ten years. In an emerging market, service providers save 59 percent over leased fiber and 68 percent over built fiber.
By deploying wireless backhaul initially and gradually transitioning to fiber, operators can reduce the net present value of their backhaul upgrade by seven percent in a developed market and 31 percent in an emerging market, compared with leased fiber access.
In developed markets, wireless backhaul produces savings of 14 percent over built fiber, with savings of 27 percent in an emerging market.
The analysis suggests that when mobile service providers have access to spectrum, they may save money by initially deploying a wireless backhaul solution that is paid off in a short period, and moving to fiber gradually at a later time, when and where it becomes available or cost effective, or when the operator is ready to deploy it.