Mobile operators will face a capacity crunch by 2017 because they have failed to plan for sufficient backhaul investment
, a new study claims.
As the demand for smartphones has increased, operators have been more concerned about network upgrades and LTE
migration in order to deal with the network congestion from the surge in global data traffic, US-based vendor Tellabs said in its study.
According to the research, carried out by Strategy Analytics, a €6.9 billion global backhaul funding gap and an associated 16 petabyte shortfall in backhaul capacity will occur by 2017.
Currently, operator forecasts are allocating 17.5 percent of the total cost of operations to backhaul investment, but Strategy Analytics said this is not enough.
“As many as 40 percent of mobile users list poor network performance as a reason for leaving an operator,” said Sue Rudd, director of Service Provider Analysis at Strategy Analytics.
“At today’s backhaul investment levels, operators could create a significant backhaul capacity shortage. This shortfall could diminish quality of service and, in turn, increase customer churn. Operators need to rethink their backhaul investments as they deploy small cells
and LTE capacity.”
The report claims that revenue lost to customer churn will be four times higher than the backhaul investment required, and that operators gain between 2.8 – 5.1 percent of revenue by addressing poor network performance issues.
“Addressing the new capacity crunch requires a highly strategic approach to backhaul,” said Dan Kelly, Tellabs CEO and president. “Operators who treat backhaul planning as a long-term, strategic investment opportunity to enhance customers’ quality of experience will produce higher revenue and profits.
“In order to maximise overall returns, operators need to seriously consider issues beyond backhaul capacity and scalability. The watchwords for operators who take a smarter approach to future backhaul planning are flexibility, synchronisation and end-to-end management.”
Alongside the survey, Tellabs announced it is extending its existing mobile backhaul solution with a new small cell aggregator that comes equipped with self-optimising network (SON) tools to speed deployment.