Hey cellcos: Guess who's got your backhaul still? That's right. Big daddy BT

Radioheads roar over cloud RAN backhaul leap for G.fast

One of the things that will not be answered by any amount of discussion about 5G is how the huge increase in bandwidth expected in next generation cellular gets backhauled. But at Faultline we have assiduously tracked the ownership of fixed line assets throughout the US and Europe, anticipating the rising cost of backhaul to cellular-only businesses, which have no such assets.

Vodafone was, for many years, the one major cellco that we felt was out of kilter with the rest of the market and it realised this and has since acquired Kabel Deutschland and Ono in Germany and Spain, opened its own fibre operations in Spain, the Netherlands and the UK, and acquired Cable and Wireless broadband assets in the UK, all to cut down the massive risk hole it once had.

No one for a moment will expect an incumbent telco in Europe to suffer in that way, with many of them having leased line capability to spare and making a killing in the backhaul market. Vodafone in the UK once declared that it would build its own wireless fibre network, only to find that BT’s backhaul using leased line pricing crashed to the floor, and Vodafone found it was cheaper to stick with BT as a partner in backhaul.

Now BT seems to be ahead of the game once again just as it has completed its acquisition of EE (Everything Everywhere) to make it the largest converged operator in the UK once again. Crippling debt forced BT to sell off its own mobile operation O2, to Telefonica, in 2004, seen largely as the worst mistake in its history. The current management can say very clearly that they have rectified this with the purchase of EE.

But this week a release from chip vendor Cavium, tells us that BT is working to trial cloud RAN base stations and server chips, backhauled by the emerging G.fast broadband technology.

One of the reasons that cellular operators need fixed lines is to ensure that fixed line incumbents don’t favour themselves with early versions of ultra-fast broadband, used for cellular backhaul. BT provides most of the backhaul lines for the entire UK cellular market, and despite Vodafone’s launch of broadband services, it will remain reliant on BT, as will all the other cellular operators, for faster and faster backhaul – whether that is for small cell deployments, capacity in-fill, LTE-Advanced or 5G.

BT said it has successfully used G.fast technology to deliver a Cloud Radio Access Network (C–RAN) service over copper, in an experiment it thinks is a world first, although we would be shocked if AT&T and Verizon were not at least contemplating such a move, given the parlous state of their own copper networks, along with the commitment of AT&T to add 12.5 million superfast broadband lines to its offerings and both of their need to stay ahead in cellular while keeping backhaul pricing under control. The US has more advanced LTE networks that much of Europe right now, and will be reaching for either more backhaul pipes or faster ones, sooner.

C–RAN is part of the emerging cellular architecture where the radio heads off the only part of a network that is placed out on the edge, and the processing of the signal is carried out back in the cloud – making the backhaul points (often called Fronthaul) the biggest worry to continued successful operation. Usually C–RAN requires a dedicated fibre link, something that increases its cost astronomically, and as we move to small cell deployments, these types of connections will be needed all over the modern city, almost on every street lamp, and driving down the price is top of every cellcos bucket list. Of course if BT gets this to market fast, it will be able to offer cheaper lines to all UK cellcos, but also it should make a lot more profit. BT will then stimulate other European operators to take the plunge earlier, helping them regain control of the cellular backhaul equation.

All of which is exceptionally bad news for suppliers of wireless backhaul, who may have previously felt that small cell deployments would lead to blossoming sales in the not too distant future.

Researchers at BT’s Adastral Park Labs in Ipswich, worked in collaboration with Cavium and delivered cellular data over copper lines at speeds of 150 Mbps to 200Mbps. We suspect that this will shortly rise to over 1 Gbps, as this type of technology matures, and further network build out shortens the loops which carry such traffic.

BT is one of many European operators which are trialling a variety of flavours of G.fast, with different chips and loop lengths and technologies to transition out of fibre connection into copper, and should soon choose its partners for nation-wide deployment. It is neck-and-neck with Deutsche Telekom, Belgacom and others in Europe to get the technology to market first, while other markets, such as the Netherlands and Spain, are clearly pushing ahead with further fiber build outs.

BT used Cavium’s Octeon Fusion–M basestation and its ThunderX server processor technology to validate this new class of RAN service.

Openreach BT’s local access network division, is trialling G.fast as an access technology in Huntingdon and Gosforth, alongside a further BT technical trial in Swansea in a bid to provide ultrafast speeds to 10 million homes by 2020.

Copyright © 2016, Faultline

Faultline is published by Rethink Research, a London-based publishing and consulting firm. This weekly newsletter is an assessment of the impact of the week's events in the world of digital media. Faultline is where media meets technology. Subscription details here.

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