Different carriers have different views about the size of the wireless backhaul opportunity, noted Ed Gubbins, an analyst for New Paradigm Resources Group, in a recent blog post.
Gubbins pointed to recent data from Zayo Bandwidth, which reported recently that average bandwidth demand per cell tower tenant grew to 31 Mb/s in the first quarter of 2011 from 19 Mb/s a year earlier. With an average of 1.5 tenants per tower, that’s an increase from 28.5 Mb/s to 46.5 Mb/s per tower. Gubbins quoted a Zayo Bandwidth exec who said he envisioned a “steady diet of opportunity for the next several years” in the backhaul market.
In contrast, Gubbins also quoted a Windstream exec who called the fiber-to-the-tower business a two- to three-year opportunity.” That exec based his comments on the observation that wireless operators will complete their 4G network upgrades by 2014.
Perhaps the reality will lie somewhere between the two.
AT&T attracted so many headlines last year with its need to feverishly upgrade cell tower bandwidth to support iPad users that people may have gotten the impression that the sharp increase in demand for cell tower bandwidth was all about current traffic growth. But as carriers undertake their 4G network rollouts, they’re building to support future bandwidth needs—and those deployments would seem to follow more of a step function, where bandwidth demand shows a steep increase during the network construction phase but then remains flat until actually traffic begins to approach the bandwidth capacity that has been deployed.
The wild card is that it’s too soon yet to tell what impact the availability of 4G will have on bandwidth demand. If it does not exceed network planners’ expectations, there could be some truth to what the Windstream exec predicted. If, like some other recent wireless services, 4G generates considerably more traffic than expected, the Zayo exec could be proven correct.
“AT&T attracted so many headlines last year with its need to feverishly upgrade cell tower bandwidth…”
News to us — they insist on 4 T-1’s at each site, even though Ethernet is available to them.
Depending on how you interpret their words, they may both be correct.
Unexpected demand may well appear a few years down the road in places where it doesn’t exist today, as Zayo is saying. But that future opportunity might also be open only to those who build out now (and next year), since their networks will be closest to those emerging demand points. So although demand may keep growing for years, the next two years may be the window of opportunity for carriers to capitalize on it, as Windstream is suggesting.
Hey Joan. I might be the source of the Zayo perspective you describe above. My belief is that ongoing bandwidth growth will lead to wireless carriers sub-dividing their cell sites into many more locations (DAS/Micro/Pico) … this will cause new waves of build-outs down the road.
Yes, we are in a major wireless build cycle that will run for the next several years. But 2014 is not an end point, rather a lull in the action. Two factors drive capital investment in wireless networks – the number of wireless device connected to the network, and minutes of use (MOUs-voice & data) from each device. When you count the proliferation of smartphones, tablets, enabled laptops, and growing machine-to-machine (M2M) connections, and that each device is churning out ever increasing Mb/s, the data traffic load on the network will grow at high double-digit rates annually with no foreseeable deadline. This means that capex for coverage and data-handling capacity, and accompanying backhaul expansion whether fiber, microwave or Ethernet, will continue apace for some time.