The evolution of technologies on the access side, from 2G to 3G and now 4G, coupled with the growing adoption and increasing affordability of 4G smartphones has led to a surge in data consumption in the country. This growth is expected to increase at an unprecedented rate in the future. According to industry estimates, data traffic on operator networks will touch approximately 4.5 exabytes per month by 2021. In order to support this growth in data volumes, the industry would require a suitable backhaul network.
Upgrading microwave backhaul
Earlier, the industry’s backhaul network mainly comprised copper. As the networks evolved from 2G to 3G, microwave replaced copper as the suitable medium for backhauling traffic. Microwave-based backhaul currently constitutes around 50 per cent of the country’s backhaul networks. However, the current shift from 3G to 4G and the growth in data demand require more advanced backhaul, which can either be established by upgrading the existing microwave backhaul network or by laying fibre to complement this network.
Telecom operators across the world use spectrum bands between 6 GHz and 42 GHz for microwave backhaul. In comparison, microwave backhaul in India is available in the 13 GHz, 15 GHz, 18 GHz and 21 GHz spectrum bands. Of these, the 15 GHz spectrum band is highly saturated and only three spectrum bands are available for operators. Moreover, as more and more data passes through operator networks, the sub-42 GHz bands would also start getting saturated. In order to curb this saturation and upgrade the existing microwave backhaul, the Telecom Regulatory Authority of India has started looking to utilise spectrum in two new bands –
E-band and V-band. E-band has a higher capacity and a low interference level. On the other hand, V-band is suitable for very high bandwidth applications but can be used only for shorthaul. Thus, E- and V-bands are some of the technologies that can be used for upgrading microwave backhaul networks in the future. However, the deployment cost of these technologies needs to come down to make it viable for the Indian market.
Case for fibre
Apart from upgrading microwave backhaul, the other option available to operators for supporting huge data volumes is rolling out a fibre-based backhaul network. Such a network offers many advantages as compared to a microwave-based backhaul network. It is not prone to fluctuations, and offers virtually unlimited capacity and multiple opportunities, apart from providing backhaul. Further, these networks have a longer life, ranging from 20 years to 30 years.
However, the current level of fiberisation in the country is only 22-24 per cent of the total number of sites. In comparison, the level of fiberisation among operators across the world is 50-90 per cent. According to industry estimates, one in every two sites in India will have to be fiberised over the next three to four years for achieving the ideal level of fiberisation that can support heavy data traffic across networks.
Challenges in fiberisation
Although the industry currently uses fibre for connecting aggregation points to base station controllers and radio network controllers, the level of fiberisation is not enough. This is because fibre-based backhaul networks require more time to be deployed and have higher costs. These costs include the cost of material as well as the cost of laying fibre and securing right of way. For instance, the rates for securing indefeasible right of use (IRU) vary from Rs 0.3 million to Rs 0.5 million per pair per kilometre in the metros and Category A towns. Moreover, the IRU rates are as high as Rs 1 million per pair per kilometre in regions like South Mumbai. The operations and maintenance cost associated with fibre is another challenge.
Role of tower companies
Currently, operators fiberise their own sites to avail of the competitive advantage offered by the superior throughput achieved through fiberisation. However, operators can explore the option of allowing fibre companies and tower companies to install fibre for them.
Tower companies already have business arrangements with telecom operators, who will ultimately use the fibre to provide services to end-consumers, which is an added advantage. Also, fiberisation is aligned with the business model of tower companies, which is based on investing in capex and offering services to operators on the opex model. This model can be extended for laying fibre in backhaul networks. Since tower companies are familiar with dealing with passive infrastructure and have the know-how to deal with the challenges associated with laying passive infrastructure, they are well equipped to undertake the task of fiberisation.
Based on an address by Bharat Bhargava, Partner, TCE, Business Advisory Services, EY