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Small-Cell Backhaul: Industry Trends and Market Overview by Monica Paolini, Lance Hiley and Frank Rayal Senza Fili Table of Contents

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Small-Cell Backhaul: Industry Trends and Market Overview by Monica Paolini, Lance Hiley and Frank Rayal Senza Fili Table of Contents ” Small-cell backhaul: Industry trends and market overview By Monica Paolini, Lance Hiley and Frank Rayal Senza Fili Table of contents I. Market trends report 3 1. Introduction: The evolving small-cell backhaul market. A more precisely targeted approach to small- cell requirements 4 2. A look at the last year: What stayed the same and what has changed. A balancing act to improve performance and reduce equipment cost and size 5 3. Methodology 6 4. Confirmed trends. Backhaul is still a key element of small-cell deployments and TCO 7 5. Emerging trends. Variety in small-cell deployments requires flexibility in the backhaul 13 II. Vendors’ profiles 18 1. Altobridge 19 2. BLiNQ Networks 21 3. Bluwan 23 4. CCS 25 5. Cisco 27 6. DragonWave 29 7. Intracom 31 8. Proxim Wireless 33 9. NEC 35 10. Siklu 37 12. SOLiD Technologies 39 13. Tellabs 41 14. VubIQ 43 15. Acronyms 45 [Part III: Vendors’ conversations in a separate file] REPORT Small-cell backhaul: Industry trends and market overview © 2013 Senza Fili Consulting • www.senzafiliconsulting.com |2| I. Market trends report REPORT Small-cell backhaul: Industry trends and market overview © 2013 Senza Fili Consulting • www.senzafiliconsulting.com |3| 1. Introduction: The evolving small-cell backhaul market. A more precisely targeted approach to small-cell requirements Backhaul is still one of the hottest topics in the small-cell community, and rightly so. This is an area of intense innovation, driven by many new entrants and an increased presence of established backhaul vendors, where much work is still needed to ensure that backhaul does not become the cost and performance bottleneck in small-cell deployments. Since we published our first report a year ago, mobile operators have gained valuable experience through trials and initial limited deployments, which have led them to develop more detailed requirements. Vendors have listened and have devoted substantial effort to developing new solutions or adding new functionality to existing ones, while keeping equipment and operating costs down. As a result, small-cell backhaul is emerging as a distinct segment within the backhaul market, with products specifically designed to meet a set of unique challenges. Small cells operate in continuously changing, cluttered environments over which operators have hardly any control, and which lack the physical and RF stability of cell towers or building roofs. As we argued in our previous report, the emergence of small-cell backhaul as a separate segment is crucial to the success of small cells, because backhaul plays a crucial role in both the performance and the business case of the small-cell under-layer. In this report, we provide an update on the latest developments in small-cell backhaul. The business-case tradeoffs and the advantages of different solution types have not changed much over the last year. But the vendor offerings have, and the report focuses on them. We let the vendors speak, and tried to get their inside story – what the drivers and targets behind their new products are, what challenges they faced, and where they want to go next. In the first part of the report, we split our overview of the market between continuing and emerging trends – what has stayed the same, and what is new. The second part gives a snapshot of what small-cell backhaul solutions are capable of today and how they meet the operators’ requirements. We profiled 13 leading vendors that have agreed to sponsor this report and which have largely complementary solutions and approaches to the small-cell markets. The third and final part of the report goes beyond features and specs, to tell us the vendors’ stories and perspectives, which are all too often buried in the marketing materials and in the data sheets. We have recorded and transcribed conversations with each of the vendors to try to capture what drives the companies and the people working there. We found the conversations to be very engaging and hope that you will too. REPORT Small-cell backhaul: Industry trends and market overview © 2013 Senza Fili Consulting • www.senzafiliconsulting.com |4| 2. A look at the last year: What stayed the same and what has changed. A balancing act to improve performance and reduce equipment cost and size These days support for small cells – broadly taken to be any base station that is Table 1. Evolution of the small-cell backhaul market smaller than a macro cell – is nearly universal. Both vendors and mobile operators Confirmed trends see small cells as a necessary complement to the macro layer, to provide additional capacity and to improve spectrum utilization. There is much to learn, however, in Small-cell backhaul requirements different from macro-cell backhaul how to deploy small cells, in terms of location, wireless interface, traffic and A higher percentage of backhaul TCO in small cells than in macro cells interference management, and, of course, backhaul. Emergence of solutions specific to small-cell deployments Coexistence of multiple solutions: Fiber and wireless, LOS and NLOS Ultimately, many of the lessons will come only once small cells are commercially deployed in fully loaded networks. In the meantime, however, it has become clear LTE small-cell deployments still limited that small cells are not going to be as cheap or easy to install as initially expected. To Infrastructure sharing needed to lower TCO get good performance and reliability, to manage interference and to achieve the Challenging network planning and installation desired capacity density, operators have to invest in best-of-breed hardware, and Complexity from a multi-vendor, multi-technology backhaul approach plan their network and choose locations carefully. It is a process that is neither quick nor cheap. And the addition of a sub-layer is bound to increase overall network Varying requirements across markets and operators complexity. Emerging trends Increased flexibility in available backhaul solutions As a corollary, large-scale small-cell deployments will take time. This will give mobile operators the opportunity to get a better understanding of how they have to evolve Partnerships among vendors the network architecture and traffic management to integrate small cells, and it will More Wi-Fi and 3G small cells give vendors time to introduce the solutions that meet performance, functionality Indoor small cells gaining new support and cost requirements. More serious consideration of the 3.5 GHz band for small-cell access The realization that small-cell deployments will require more time, cost and effort A blurring line between LOS and NLOS than initially expected has a strong impact on many aspects of backhaul Vendor focus on shorter installation process requirements. We will review them in more detail in the following pages, but the DAS as a complementary approach overall push is for backhaul solutions that pack more performance, functionality and Remote-baseband models creating demand for fronthaul solutions resiliency into a smaller form factor with a lower price tag. REPORT Small-cell backhaul: Industry trends and market overview © 2013 Senza Fili Consulting • www.senzafiliconsulting.com |5| 3. Methodology A common approach in analyst reports is to collect and filter information from Table 2. Report sponsors vendors, and then distill a comprehensive overview of the competitive landscape that identifies main trends, differentiating approaches, and market targets. From Altobridge www.altobridge.com detailed, complex and possibly confusing information, such reports strive to generalize an easy-to-grasp vision that helps the reader understand the market. BLiNQ Networks www.blinqnetworks.com The first part of this report follows this approach and offers our assessment of the Bluwan www.bluwan.com small-cell backhaul market based on consulting work, research and briefings with vendors and operators, as well as the research done for this report. We listened, CCS www.ccsl.com thought about what heard, and reported. We expect our audience to be actively Cisco www.cisco.com engaged in small-cell backhaul, so we have avoided broad overviews and concentrated on what we learned over the last year. DragonWave www.dragonwaveinc.com In the rest of the report we take a complementary approach. We take a deep dive Intracom Telecom www.intracom-telecom.com into what vendors are doing, which is where most innovation is right now. Mobile operators are still primarily involved in trials and limited deployments and, hence, NEC www.nec.com are busy evaluating vendors for their large-scale deployments. As a result, we believe this is a good time to present a report on what vendors are doing and make the Proxim Wireless www.proxim.com results available to all. Siklu www.siklu.com To achieve these goals, we invited vendors in the small-cell backhaul market to share their perspectives and provide support for the report. The 13 participating vendors SOLiD Technologies www.solid.com are listed in Table 2. They all received the same information about our process and the same request for information on their product. They all had the opportunity to Tellabs www.tellabs.com send us background information on their product so we could identify good topics for the conversations. While we had a list of areas to cover during the conversations, VubIQ www.vubiq.com they were unscripted and, to the extent possible, tailored to each vendor’s approach. The report includes transcriptions of the conversations, and for most, a video version is also available online here. REPORT Small-cell backhaul: Industry trends and market overview © 2013 Senza Fili Consulting • www.senzafiliconsulting.com |6| 4. Confirmed trends. Backhaul is still a key element of small-cell deployments and TCO Small-cell backhaul requirements different from macro-cell backhaul. At first sight, small-cell backhaul can be perceived as a dressed-down version of its macro-cell counterpart.
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