How can C-RAN cut costs for mobile operators?

Video downloads, social media and mobile video games are a double-edged sword for wireless carriers: more data use means more revenue, but it also means carriers must invest more in their networks to meet that demand. When data price wars put pressure on the revenue side of the equation, carriers find themselves looking for a way to limit expenses without falling behind.
“Operators need to maintain very high-quality networks, but also need to hold their cost structures as we’re seeing end-user pricing under significant pressure,” said analyst Aaron Blazar of Atlantic-ACM. Blazar said many operators are trying to take advantage of new technologies like centralized radio access networks to control costs and potentially boost network performance at the same time.
“On a go-forward basis we expect … the focus to be non-macro densification and with that we’re seeing three core areas of focus … [distributed antenna systems], C-RAN or small cell,” said Blazar.
“We’re seeing the second phase of the RAN evolution with C-RAN,” said Marquis Dorais, fronthaul product line manager at test equipment maker EXFO. Dorais explained the C-RAN architecture uses fiber to connect base station equipment to tower top remote radio heads and antennas. Since RF signal show less degradation over fiber compared with copper, the base station can be up to 20 kilometers away from the tower, he said. Operators can consolidate base station equipment for multiple cell sites at a central office or data center.
How does C-RAN save money for operators? It can cut costs in at least two ways. First, real estate is almost always less expensive at a data center location than at a cell tower site. Second, power loss is much lower with fiber than with cable, so the fiber connection associated with C-RAN (often called fronthaul) can reduce operating expenses.
“In some cases we saw up to 50% or more power loss in those copper cables,” said Dorais. “You’re going from legacy mobile installations, so the copper from the bottom to the top, to FTTA, so fiber to the antenna or fiber to the tower. In that case you potentially save up to 50% on the electrical bill. Moving towards a C-RAN architecture where the base stations can be centralized in a data center or in a central office and the remote radio heads are many kilometers away, in that case you save an additional 10% on top of the 50% that’s already saved, just by centralizing those BBUs in a central location where you basically save on your energy bill for cooling, ventilation, and all that.”
C-RAN may also lay the groundwork for the “5G” networks of the future. Analysts expect 5G networks to connect mission critical machines as well as personal mobile devices. For that, these networks will need even faster response times than today’s LTE networks. This will require very low latency communication between base stations, so colocated base stations may be a cost-effective way to implement next-generation architectures.
For more on C-RAN, see our recent tower technology report and webinar.
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