This presentation was used in the 'What to do until the fibre arrives' webinar. The presentation examines how mobile operators can lower backhaul costs by using wireless backhaul now, and investing in fibre later. This strategy uses wireless as an interim solution for operators planning to move to fibre that need to increase backhaul capacity, but cannot move to fibre today. The presentation shows over ten years, operators can save 27% when deploying wireless first, and building a fibre network later - or save 31% when deploying wireless initially and leasing fibre later. The full white paper with more detailed analysis can be downloaded from: http://cbnl.com/resources/wireless-backhaul-can-ease-transition-fibre

1. www.cbnl.com
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Next generation thinking
What to do until the fibre arrives
- profitable backhaul strategies
for today’s market
16 May 2012

2. What to do until the fibre arrives - today’s agenda
Monica Paolini, PhD
Founder and President, Senza Fili
•Can wireless backhaul ease the transition to fibre?
Lance Hiley
VP Marketing, Cambridge Broadband Networks Limited
•Why point-to-multipoint (PMP) is so good for this approach
•Operator backhaul deployment examples
www.cbnl.com

3. Wireless and fibre backhaul in mobile networks: SN A
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is two better than one? C N UT G
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What we know
• Fibre is often more expensive than wireless backhaul,
but mobile operators plan to move to fibre in the long term
• Mobile operators face a demand for increased backhaul capacity that has to be
met in the short term
The question
• What should they do now to increase backhaul capacity?
• Could mobile operators planning to move to fibre backhaul meet their backhaul
requirements in the short term and save money, by deploying wireless backhaul
first and move to fibre later?
What we did
• We examines the financial implications of a hybrid approach: wireless today, fibre
later
• We asked: is it cost effective? And under which circumstances?
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4. Background assumptions
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We modelled mobile operators that
• Operate in emerging and in developed markets, with different fibre costs and
availability
• Plan to build their own fibre network or to lease fibre links
• Require higher-capacity backhaul, or plan to expand their network to new macro
cell sites or to small cells
Cost assumptions Developed market Emerging market
Capex per cell site per annum
Wireless installation, spectrum, and equipment $13,500 $13,500
Leased fibre installation* $6,300 $7,700
Cost to deploy fibre per km $85,000 $85,000
Fibre link distance 1.5 km 5 km
Opex per cell site per annum
Wireless $8,050 $8,050
Leased fibre $12,000 $22,000
Built fibre $3,500 $3,500
* Benchmarked against data from the US, UK, and South Africa
For additional details on cost assumptions, see “Crucial economics for mobile data backhaul”, Senza Fili Consulting.
|4| © Senza Fili Consulting LLC 2012

5. Four steps in our analysis
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Step 0
Look at different solutions, separately
Step 1
Gradual transition to fibre
Step 2
Timing of transition to fibre
Step 3
Sensitivity analysis
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6. 0 Three solutions considered: SN A
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Wireless, leased fibre, built fibre C N UT G
OS L IN
PMP Wireless More expensive to install than leased fibre, lower recurring costs
Leased fibre Highest opex solution
Built fibre High capex, longer deployment time, lowest opex
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7. Wireless backhaul options (licensed spectrum)
Conventional PtP
• For: High capacity
• Against: Coverage awkward, spectrum opex, high installation costs
E-band
• For: High capacity
• Against: High capex and opex
LoS multipoint microwave
• For: Good coverage, low cost of ownership, High capacity
• Against: Requires area-licensed spectrum
Non-line of sight multipoint microwave
• For: Good coverage, low cost of ownership
• Against: Low capacity, spectrum can be expensive
www.cbnl.com 7

8. Architecture 1: Point-to-Point Microwave Radio, Star Topology
• The most common microwave topology in use today
− For N links, 2N radios
− Dedicated RF channel for each node B served
− Well-suited to constant bit rate traffic
− Well-suited to long links
www.cbnl.com 8

9. Architecture 2: Point-to-Multipoint Microwave Radio
• The fastest growing microwave topology today
− For N links, N+1 radios
− Shared RF channel amongst all node Bs served
− Well-suited to variable bit rate (bursty) traffic
− Well-suited to dense environments
www.cbnl.com 9

10. Wireless backhaul topologies
PtP topologies Multipoint
Tree (point-to-point) Ring Mesh Multipoint
Key
Links
small cell low capacity
pop high capacity
with redundancy
www.cbnl.com 10

11. PMP Advantage Increases with Density: CAPEX and OPEX
Point-to-Point Point-to-Multipoint
2 ODUs per link 3 hub ODUs plus 1 RT per link
2 truck rolls per link added 1 truck roll per link added
2 antenna rentals per link 3 hub site rental plus 1 per link
2 units power per link 3 unit power per hub plus 1 per link
• 160 ODUs/truck rolls/antennas • 93 ODUs/truck rolls/antennas
• 160 units of power consumption • 93 units of power consumption
At 80 Links = PMP Saving of 67 ‘units’
www.cbnl.com 11

12. Opex analysis: using UK published leased fibre prices
• Leased fiber pricing used in the Cumulative capex and opex, Year 5
base case is higher than many
$120,000
developed countries
$100,000
Model strives to use median values,
Per RAN site
including developed and emerging $80,000
countries, which pushes prices up $60,000
$40,000
• Using UK published retail
$20,000
pricing: Fiber 40% more expensive
than PMP, 27% less expensive $-
than PTP PMP PTP E-band Fiber, leased
Capex Opex
• In competitive markets, PTP is
140 280 500
more expensive than leased fibre 34 mbps mbps mbps mbps
Installation $ 2,000 $2,000 $2,000 $2,000
•PMP remains only alternative to
Yearly rental fees $10,000 $14,000 $20,000 $30,000
fibre
www.cbnl.com 12

13. 1 SN A
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A gradual transition to fibre
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We looked at five backhaul options:
• Wireless for the entire period
• Leased fibre for the entire period
• Built fibre for the entire period
• Initial wireless, with a 10% leased-fibre substitution per year
• Initial wireless, with a 10% built-fibre substitution per year
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14. 1 Deploying wireless as an interim backhaul SN A
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solution saves money C N UT G
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Developed market
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15. 1 Deploying wireless as an interim backhaul SN A
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solution saves money C N UT G
OS L IN
Emerging market
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16. New fibre deployment: Urban Ring
•Early stage fibre deployment limited to urban rings
•PMP extends reach of fibre rings quickly, with similar
performance
•Delivers ubiquitous coverage quickly
www.cbnl.com 16

17. 2 When should the operator SN A
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move from wireless to fibre? C N UT G
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Wireless as an interim solution towards fibre results in savings at a cell site if used
for at least 5 years in the leased-fibre scenario, and 4 years in the built-fibre scenario
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18. Extending reach of existing macro cells (densification)
•Late-stage fibre deployment to macro cells
•Upgrade or densification of existing network
•Informed capex decisions for future fibre
upgrades
www.cbnl.com 18

19. 3 If fibre costs go down, does it still make sense SN A
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to use a wireless interim solution? C N UT G
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Wireless as an interim solution towards fibre results in savings when leased fibre costs
are $13,000+ per year, and the cost for building fibre are $30,000+ per km
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20. Metrocell street fibre cabinet extension
 Leverage availability of
fibre at street cabinets
 Co-locate PMP hubs to
beam high-capacity
multipoint bandwidth
down urban canyons
 Extends fibre
connectivity to street
furniture-mounted
metrocells quickly
without disruption
www.cbnl.com 20

21. Implications: wireless backhaul can save money to SN A
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operators with a long-term fibre strategy C N UT G
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Operators may deploy wireless backhaul as an interim
solution ahead of fibre if:
• Operators plan to lease fibre, but leased fibre is not available or is
expensive
• Operator plan to build a fibre network, but lacks the resources to do so
within the required time frame, or prefers to extend the deployment
over a longer period
By deploying wireless backhaul initially and gradually
transitioning to fibre, operators can reduce the NPV of
their backhaul upgrade by:
• 7% in a developed market and 31% in an emerging market compared
with leased fibre
• 14% in a developed market and 27% in an emerging market compared
with built fibre
| 21 | © Senza Fili Consulting LLC 2012

22. Implications: wireless backhaul can save money to SN A
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operators with a long-term fibre strategy C N UT G
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Solution When to adopt it?
Lowest-cost solution, to be preferred if fibre is not required, not available, or
Wireless
not cost effective.
High-opex solution. Its cost can approach built fibre over the long term, but it
is typically less expensive than built fibre. Where it is available and inexpensive
Leased fibre
(up to $10,000 lease cost per site per year), leased fibre is financially the best
solution.
In a gradual transition to fibre, or at cell sites where a wireless solution can be
Wireless
used for 5 years or longer, this is the most cost-effective solution for operators
to leased fibre
committed to fibre backhaul in the long term.
The high initial investment makes built fibre the most expensive option, unless
Built fibre
the deployment prices are very low ($30,000 or less per km).
This is the best solution for operators committed to building their own fibre
Wireless network and able to (or forced to) postpone the fibre network deployment.
to built fibre The operator can save money by deploying wireless initially and fibre in four
years or later, rather than deploying fibre initially.
| 22 | © Senza Fili Consulting LLC 2012

23. Who we are
• Formed in 2000
• Global marketshare
leader in line of sight
point-to- multipoint
microwave technology
• Our VectaStar multipoint
product is selling to 7 of the
top 10 mobile operator groups
www.cbnl.com 23

24. www.cbnl.com
Your questions
Download the free white papers
• ‘Crucial economics for mobile data backhaul’
• ‘Wireless backhaul can ease transition to fibre’
www.cbnl.com/resources/white-papers
Monica Paolini monica.paolini@senzafiliconsulting.com
Chris Wright cwright@cbnl.com
Copyright © Cambridge Broadband Networks Limited. All rights reserved.