Backhaul costs for small-cells account for approximately twice as much of the TCO (Total Cost of Ownership) as they do in the macro-cell layer, according to a new report from Senza Fili. The report, titled “Backhaul for small cells: Finding the right cost/performance tradeoffs to meet the backhaul challenge,” is based on interviews with  industry participants and a financial modeling study. It also identifies emerging trends in the provision of small cell mobile backhaul technology.

“Without high-capacity, ultra-compact, low-cost backhaul, the small-cell market will struggle to grow,” wrote report author Monica Paolini in a blog post. “Backhaul for small cells requires more than just re-purposing existing backhaul solutions. This is a new market for backhaul vendors – a big opportunity but also a big challenge as they strive to meet a very different set requirements from what they are used to in the macro-cellular environment. New products are not only required to be smaller and cheaper, they have to operate in more challenging RF environments.”

Telecompetitors are working on a number of options, but no single technology will provide a solution: fiber, line-of-sight (LOS) and non-line-of-sight (NLOS) will all be required to provide a new layer of backhaul infrastructure for small cell networks, Paolini found.

“Per-link costs of $2,000 with high capacity and extremely compact form factors are needed to close the business case, for both sub-6 GHz licensed and millimeter wave (60 GHz and e-band) spectrum – the two bands expected to dominate the small-cell backhaul market,” she concluded.

Additional findings include:

  • Fiber will be crucial to the success of small cells, but will be mostly used in aggregation points. At a $2,500/year lease price, fiber becomes more cost-effective than wireless. But in most markets lease prices are higher than this, and wireless backhaul is expected to be prevalent.
  • Integrating backhaul within the small-cell enclosure allows operators to install one piece of equipment instead of two at the small-cell site, and allows operator to reduce their TCO by up to 27%. But it also reduces their flexibility in selecting solutions and vendors.
  • Backhaul sharing among operators is another way to keep small-cell costs down, allowing operators to save up to 20% of their TCO.

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