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HSPA/PSEUDOWIRE - Rescue remedy?
Could high speed packet access become high cost packet access, asks Pat Dolan
Maturity often brings a heightened sense of reality, a healthy dose of cynicism, and a degree of wariness around new products or services that pertain to be 'the next big thing.'
Some mobile networks are now 25 years old. They suffer from declining revenue and are struggling to keep abreast of seemingly continuous advances in technology. Given the maturity of these networks, as a shiny new acronym takes the stage in the mobile market, operators can be forgiven for treating it with a degree of suspicion and for ordering it to undergo a full examination.
One such acronym is HSPA – High Speed Packet Access, which has been promoted by mobile operators as the dream data network, designed to realise the promise of 3G. HSPA has been billed as the rescue remedy that will enable delivery of data services that will convince consumers to upgrade their price plans. It may even succeed in getting the tardy corporate market to spend serious money going mobile.
So how can an opportunity to make more revenue be viewed suspiciously in a market where operator margins are declining?
The answer depends on the profitability of that revenue, and how much it costs to achieve. The issue isn't really how much mobile users spend. The key figure is how much profit margin users deliver to operators – and that depends on how much it costs operators to deliver services.
HSPA, according to the mobile industry, will enable the delivery of high-bandwidth services to a standard that will encourage use. The industry expects the major users to be the generation that has grown up with mobile – the so-called Echo Boomers, children of the Baby Boomers, – to whom technology is a given. They are the generation of the iPod device, laptop and Xbox® video game system, who expect gadgets to not only look good but to deliver services at any place and any time. These users are the mobile gamers, the TV-on-demand consumers, the market that expects technology to work, and work well.
Similarly, the corporate market is there for the taking – the success of WiFi demonstrates that high-speed mobile wireless connectivity has a following, when it works properly.
Therefore, with the introduction of HSPA, operators can be confident that the amount of data carried over the mobile network will increase. Here is where the careful inspection of the technology kicks in. To handle the anticipated increase in traffic and maintain the quality of service required to not only court but keep the high speed data user, operators must invest in their networks.
A report from Gartner published last year stated: “Vendors present HSDPA as a simple software upgrade on the Node B in base stations. However, feedback from operators indicates that, even for major vendors, this may not be the case.”
It may indeed not be the case. Put more traffic on the same motorway and you get a traffic jam. Then you must add more road to accommodate the traffic. And it all costs money.
The potential bottleneck for HSPA lies in the backhaul – not perceived as the most glamorous part of the network, but the part that decides whether the traffic flows freely or grinds to a halt. Backhaul is the transport of data between the Radio Network Controller (RNC) and the Node B (base station) in the 3G/HSPA-capable network. Traditionally in 2G/2.5G networks, backhaul capability was provided by E-1 leased lines. There was no great choice when those networks were implemented, and the leased-line capacity of 2Mbps served the voice and minor data needs of those networks to date. But when you consider that Gartner puts the typical cost of an E-1 link at $4,500 or $5,600 per year, and HSPA driving the requirement to 10 or more E-1 links per site, the cost implications begin to bite.
But all is not lost. The world has moved on from E1. There are now other backhaul solutions available. It is crucial for operators today, more than ever, to consider the cost implications of the backhaul transport choice. Each E-1 link operators add increases their transport capability. It also automatically adds more cost.
Pseudowire technology can address both cost and speed. Pseudowires enable more cost-effective networks by enabling backhaul over packet-based technologies such as Metro Ethernet, Ethernet Microwave and DSL. They also can protect operators' investment in their existing networks by providing a bridge between “old” and new transport models. Take this route, and the investment to provide a network capable of delivering services over HSPA to a standard expected by the user becomes a realistic, sustainable and economically smart move.
One operator already enjoying the inherent benefits of pseudowire technology is Telecom Italia, with others giving it serious considerations too. Telecom Italia for example has an award-winning application for transporting ATM-based 3G traffic across an Ethernet network.
Operators need a clear strategy for backhaul upgrades to realise the potential of HSPA. Following the “if it ain't broke, don't fix it” E-1 path will deliver bandwidth, but at what cost? Backhaul networks are already one of the largest operating expenses for mobile operators. If the market wants to deliver high speed and not high cost data packet access, then maybe it's time to make a new choice.
Pat Dolan is VP & General Manager EMEA at Tellabs
www.tellabs.com
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