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June 7, 2010

Overall, there are several challenges looming for the wireless industry. Because of ever-growing consumer demand, wireless carriers are under increasing pressure to further expand their network footprints and launch new applications and service bundles.

The higher network capacity demanded by those data-intensive services translates into more expensive network upgrades and more expansions, even as per-customer revenues decline due to more intensive and competitive market forces.

And while all that network expansion creates many new opportunities for the mobile operator to pursue, it comes with its own set of challenges. Rural regions are typically less accessible from an infrastructure standpoint and generally have smaller addressable customer populations.

Network buildout and therefore operating costs are usually much higher, and potential new revenue generation is lower. Not a very good business environment in any industry!

Chief among wireless carriers’ concerns in expanding into any region is the cost of backhauling traffic. In particular, backhauling the higher-bandwidth data and multimedia services that makes up an ever-growing percentage of network traffic aggregration.

Overall market penetration rates and the state of current competition in those markets is typically most intense in urban centers for mobile operators. One of the best ways for mobile operators to remain competitive is by having the most complete coverage maps for a specific region, which means extending their networks beyond the urban core to the surrounding, outlying areas.

But of course, this is easier said than done.

As a result, many wireless carriers are beginning to build their networks outward, expanding their footprints and services into areas that are more rural but often are still a critical part of their customers’ connectivity requirements.

Backhaul has long been a limiting factor in the profitable expansion of mobile networks, and the problem is even bigger in rural regions.

Mobile service operators that are expanding their networks have a multitude of backhaul technologies at their disposal.

However, carefully selecting the proper technology and location is essential to developing a profitable service that will support the number of wireless subscribers in the areas of expansion for at least the next two to three years.

Factors such as area coverage, overall efficiency, performance and cost among others, typically are the main points of consideration in choosing a backhaul solution. The implementation costs of terrestrial infrastructure backhaul solutions like fiber and microwave can be prohibitive in larger rural regions, because of both geography and the increased distance between addressable population centers.

Recent research reveals that satellite transmission in the Ka-band will be eight to ten times lower than Ku-band and C-band transmission. This means that on a per-MHz basis, backhaul infrastructures based on Ka-band transmission can come close to being competitive with traditional T-1 / E-1 backhaul infrastructures.

Traditional satellite connectivity has long been viewed as one of the only options for backhaul in rural regions, though it has traditionally been viewed as a niche option for operators.

However, there is an distinct alternative that operators operating or expanding into rural markets may have overlooked in the past. Given the potential cost savings it’s worth another look.

One of the main concerns with satellite transmission is that as you increase in frequency, signals become more susceptible to rain fade. This occurs because of the frequency wavelength: The longer wavelengths of C-band are less susceptible to rain attenuation than the shorter wavelengths in the Ku- and Ka-bands.

As a direct result, transmission in C-band typically provides the carrier-grade three to four 9s of availability.

At the higher operating frequencies of Ku-band and Ka-band, however, signal strength may be affected by heavy rain conditions. When signal strength is degraded, throughput can be slower – or in extreme conditions, service can sometimes be interrupted, contributing to one of the industry's biggest problem: dropped calls.

For wireless operators, such issues and performance limitations typically mean that Ka-band backhaul is considered as a complementary or backup solution for tier one. But considering the cost advantages that can be realized from deploying Ka-band backhaul, and the cost constraints of rural market deployment, many now believe the advantages far outweigh the disadvantages, at least in large rural markets.

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Source: WMC.