OPINION: The changing nature of mobile backhaul in sub-Saharan Africa
- Published on 03 June 2016
Sub-Saharan Africa is seeing continued demand for connectivity, and with the World Bank estimating that a 10% increase in broadband penetration can deliver up to 1.5% GDP growth, its economic importance should not be underestimated.
This is becoming more important as after a decade of solid economic growth, the African economy entered a slowdown period with growth falling from 4.6% in 2014, to 3.4% in 2015.
This economic concern makes providing connectivity to small and medium-sized enterprises (SMEs), which comprise 80% of businesses in sub-Saharan Africa, even more important than before.
This demand for connectivity has created a huge opportunity for mobile network operators (MNOs) and the new wave of data-only LTE players. Yet despite the opportunities associated with widespread LTE, there are many challenges. Building and managing a LTE network requires careful planning, not least the technical and financial requirements concerning the correct choice of backhaul. These calculations are critical in selecting the most appropriate solution and the most attractive business case.
The challenges of building LTE networks
With their high population density, youthful demographics and increasing number of new business ventures, the socio-economic profile of many fast-growing urban areas across Africa has led to a pent-up demand for high speed connectivity (mobile and fixed). This, coupled with low fixed broadband penetration in many African regions, means operators need to offer more wireless connectivity to meet market demand.
However, LTE has historically required a large initial investment of both money and time to deploy, meaning operators often struggle to justify investment. For example, once an LTE network is established, MNOs have to focus on meeting the increased backhaul capacity demands. This can become a struggle in an environment where there is low average revenue per user, creating a challenge to find a solution with a low capital expenditure (CAPEX) and operational expenditure (OPEX) that creates a viable business case.
Despite these challenges, there is a strong drive amongst MNOs to be the first to market, and attract the initial wave of early LTE adopters. Yet unlike Europe, the focus of LTE in Africa spans beyond mobility. The onset of LTE has seen the emergence of a new range of data-only LTE providers seeking to service the broadband needs of homes and businesses. This places pressure on MNOs to bring their LTE services to the market quickly, or risk becoming unpopular with a user base more concerned with data than traditional voice services.
Supporting a rapid roll-out in a cost efficient manner hinges on choosing the right backhaul technology. Choosing the wrong solution could see an operator landed with exorbitant costs, or an unreliable service, making the evaluation of these technologies of paramount concern.
Technology choices for mobile backhaul
In almost all scenarios operators adopt backhaul strategies where a variety of technologies are deployed, complimenting each other based on their strengths for specific use cases:
• Satellite backhaul has the benefit of being able to cover low-density populations that lack existing infrastructure or are limited by geographical barriers (distance or harsh terrain). The high cost of satellite, limited bandwidth and issues with delay will continue to restrict its use to remote scenarios.
• Fibre backhaul has the benefit of high capacity. However, laying new fibre is slow, costly, involves regulatory hurdles and suffers from reliability issues. Where fibre is deployed aerially it is often susceptible to damage and theft.
• Microwave and millimetre wave backhaul has the benefit of being quick and simple to deploy across a variety of terrains, the capacity to handle the most modern LTE networks and the cost efficiency to provide operators a highly attractive business case for a wide variety of deployment scenarios. It is this combination of characteristics that make this the most common form of backhaul worldwide.
Wireless backhaul is specifically worth highlighting, as is particularly suited to the challenges of this evolving marketplace.
These technologies can be deployed quickly, provide the capacity needed for LTE and offer significant CAPEX, OPEX and total cost of ownership (TCO) savings compared to alternative technologies.
For example, point-to-multipoint (PMP) microwave has recently been found by Real Wireless to deliver TCO savings of up to 50 percent over managed fibre or point-to-point microwave, while delivering similar carrier-grade services. PMP can also generate a 1.8x higher return on investment for enterprise access, making the technology a perfect fit for service providers to connect SMEs.
This business case is strengthened by the increased performance now available through PMP microwave. CBNL's market leading VectaStar® solution now offers up to 1.2Gbps per sector and 14.4Gbps per hub site. The combination of increased cost efficiency and performance has created a business case that has been quickly adopted across Africa.
The future of African mobile networks
So what does the future hold? With sub-Saharan Africa's continued demand for connectivity, we expect to see new LTE deployments complement existing fixed broadband services. This will be supported by more agile backhaul solutions that offer more cost effective strategies to scale network capacity and reach.
Technologies like PMP microwave are now incorporating virtualisation techniques that enable multiple services—such as LTE backhaul and high-end corporate access—to be served from shared physical infrastructure.
Operators, seeing the growth potential the enterprise segment represents, are now waking up to the potential of network functions virtualisation (NFV) to help reshape their business models and provide a more competitive edge in the market.
Looking ahead, we expect to see continued growth of converged networks, fuelled by operators' push to introduce more unified communication strategies.
* Dr John Naylon, founder and CTO, CBNL
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