U.S. cellular networks will need fatter pipes to the wired Internet to keep delivering a satisfying mobile experience: nearly 10 times fatter by 2016, according to research company iGR.
Five bars on a phone's signal gauge won't mean a fast Internet connection unless there's a fat enough link between the cell tower and the wired Internet to carry all the traffic, said iGR founder Iain Gillott. Upgrading those links, known as backhaul, is a high priority for mobile operators over the next few years, Gillott said.
As consumers use more smartphones, tablets and other devices over the coming years, the need for backhaul capacity will grow in step, he said. Specifically, iGR studied the traffic on cellular wireless networks and concluded that the total demand for mobile bandwidth at peak hours in the U.S. in 2011 was 750Gbps (bits per second). By 2016, it's forecast to reach 7.3Tbps, or about 9.7 times as much.
To meet that demand, carriers will have to increase their backhaul capacity by a compound annual growth rate (CAGR) of 58 percent during that period, Gillott said. Along the way, they will also change the mix of technologies they use for backhaul, moving aggressively from copper lines to fiber and, in some cases, microwave, he said.
Another analyst expects even faster growth. Dell'Oro Group analyst Jimmy Yu estimates that worldwide demand for backhaul capacity will grow at a compound annual growth rate of 70 percent between now and 2016.
Powerful and efficient new wireless standards, especially LTE, will allow mobile operators to solve performance problems on radio-access networks. But they also invite subscribers to use cellular for more demanding applications, including multimedia. Carriers want to make sure they don't create a new performance problem.
"If you don't put sufficient backhaul in, you just move the bottleneck, and that is a real concern of theirs," Gillott said. An average base station has a connection of about 5Mbps, he said. In four years, some easily may need 1Gbps.
Most base stations still are connected to a wireline network via traditional copper interfaces, according to iGR. In 2011, 60 percent used copper, 30 percent had fiber and 10 percent were linked via wireless microwave links through the air, Gillott said. By 2016, he expects 67 percent fiber, 19 percent copper and 14 percent microwave.
Aside from microwave, backhaul connections in the U.S. are most often supplied by incumbent wireline carriers or cable operators. Although Verizon and AT&T are also rivals to other mobile operators, the federal government wouldn't let them use that power to block or discriminate against operators such as Sprint and T-Mobile, Gillott believes.
Fiber backhaul should be good news for mobile subscribers who want to keep using more data. Once a bundle of optical fibers is installed, it can carry more data almost without limit as long as the equipment on either end of the fiber is upgraded. But that will require an ongoing commitment by the carriers, who each will have to buy new optical gear for 40,000 or 50,000 base stations to keep boosting capacity, an expensive proposition, Gillott said. Another advantage to fiber is that it's better suited to the precise timing requirements of LTE, Gillott said.
Another new variable in the backhaul equation is the introduction of small cellular and Wi-Fi base stations. Carriers don't yet know how many of these they will end up using, Gillott said. Collections of small cells may themselves be meshed together across areas where fiber or microwave can't easily be deployed, but the cumulative traffic from a mesh of cells may require one of the biggest backhaul links, such as a 1Gbps fiber connection, he said.
The trend is likely to be similar outside the U.S., with the difference that microwave makes up more of the backhaul, especially in Europe and Latin America, for various regulatory and competitive reasons, Gillott said. He expects that difference to remain.
Backhaul is an element of a mobile network where there are no shortcuts for the operators, Gillott said. "They are aware of the problem, they're aware of the danger, they just have to spend the money and do it."