Backhaul has become a crucial component for the wireless industry as it moves from 3G to LTE networks, as the increased capabilities provided by the technology enhancements require corresponding advances in backhaul capabilities.
“Similar to the demand for high data speeds seen in the enterprise segment, wireless carriers require high data speeds to return data to their network backbone, and fiber is far superior to the legacy T-1, copper, and wireless/microwave backhaul, in our view,” noted Wells Fargo Securities senior analyst Jennifer Fritzsche, in a recent report.
This need has led a number of non-traditional players to the market, including cable television and Internet providers that can rely on their extensive “in-ground” assets to supply fiber backhaul to cell sites. Earlier this month, Time Warner Cable announced it had completed construction on providing fiber backhaul to its 10,000th cell tower, showing strong growth for the company.
TWC said it began providing backhaul services to cell sites in early 2008, following nearly two years of working through various development models. Since that launch, the company has implemented a “hard-core deployment strategy,” according to Thane Storck, VP of carrier services at TWC.
In an interview with RCR Wireless News, Storck explained that TWC’s backhaul strategy was currently focused on its cable television markets where the company has an extensive inventory of fiber running in the ground. Those markets cover approximately 25% of the country, including markets in California, Texas and New York.
Storck added that the company is currently working with six mobile network operators, though he did not name names. That offering provides backhaul speeds up to 10 gigabits per second, which would seem sufficient for current LTE deployments.
TWC recently reported that revenues from its wholesale transport service increased 38.6% year-over-year during the second quarter to $61 million, adding that overall business services segment revenue growth was linked in part to increased revenues from cell tower backhaul.
Fritzsche noted in her report that while telecommunications stalwarts AT&T, Verizon Communications and CenturyLink remain market leaders in providing fiber, she singled out players TWC, Level 3 and Integra as those with a good chance to take market share.
Storch noted that the push for small cells will also open up new opportunities for TWC, noting such deployments “are more complex.” The company’s offerings for that segment include providing both power and backhaul, which are two of three main challenges noted by many analysts handicapping the industry’s move to small cells, with the remaining challenge being siting.
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