5G Will Need Upgraded Backhaul & Fronthaul Solutions

The year 2018 has been a signpost one for 5G. The 3GPP had an official sign-off for Release 15 (aka Phase 1 for 5G), which ratified a number of key features for 5G networks. Work is also accelerating for Release 16 (aka Phase 2 for 5G), which will be complete in December 2019 and will address the core network elements for the 5G telco.

On other fronts, the momentum for 5G is also well underway. South Korea carried out 5G demos at the PyeongChang Olympics and NTT DOCOMO has declared preparations for the full commercial demonstrations at the Tokyo Olympics is on schedule. Elisa in Finland and Estonia is one of a number of mobile service providers (Ooredoo in Qatar being another) to report having a “commercial” 5G network up and running. It is debatable whether one can have a fully operational 5G network without a commercially available 5G mobile handset or a Universal Serial Bus (USB) dongle, but that is a question that can be better addressed by ABI Research’s mobile device research team. Instead, this foresight focuses on another critical feature of the 5G network that needs to be addressed: the backhaul capabilities of networks.

Mobile traffic has been growing at an exponential rate. 5G is going to turbocharge the growth of mobile traffic. At the end of 2017, total mobile subscriptions worldwide reached 8 billion. A number of regional markets are saturated, but global subscriptions will continue to grow, reaching 9.6 billion by 2025. 3G and 4G will represent 51% of total subscriptions, while 5G subscriptions are anticipated to surpass 849 million. Mobile data traffic is anticipated to grow at a Compound Annual Growth Rate (CAGR) of 28.9% to surpass 1,307 exabytes on an annual basis in 2025. 4G and 5G subscribers may only represent 55% of total subscriptions in 2025, but they represent 91% of the total traffic generated in 2025.

Mobile carriers are increasingly facing the reality of having to deploy a Heterogeneous Network (HetNet) architecture of macro and small cells that may rely on 3G, 4G, and 5G. In 2017, the majority share of backhaul links (an aggregate of macrocells and small cells) deployed was in the traditional microwave 7 GHz to 40 GHz (56.1%) bands. The higher bandwidth requirements of LTE are driving a significant share of fiber (26.2%). Bonded copper xDSL connections (3.5%) were available in 2017, but the need for this technology will decline over the next 7 years. Satellite-based backhaul, which primarily plays a role in backhauling traffic in peripheral locations or rural environments where microwave may not exist, represents 1.9% of backhaul links worldwide.

On a worldwide basis, fiber-optic backhaul is expected to grow to 40.2% of macrocell sites by 2025, which just eclipses microwave in the 7 GHz to 40 GHz band with 38.2%. Microwave Line-of-Sight (LoS) in the 7 GHz to 40 GHz bands is still a long-term viable solution for macrocell sites. Microwave links in the 41 GHz to 100 GHz bands will double from 5.1% to 12.6%.

The outlook for 5G does look very positive. 5G will provide enhanced data throughput and enhanced low latency, as well as enhanced reliability that will transform a number of applications. Yes, it will boost data rates for data access on the go, but also broadband fixed wireless access. On top of that, 5G has the potential to empower smart manufacturing, smart cities, e-health, and drone and robotics management.

5G service rollouts, however, could be held up in a number of markets. In China, Japan, Korea, and the United States, fiber-optic rollouts have been exemplary. In 2017, fiber-optic backhaul represented 79% of cell sites in Northeast Asia and 69% in North America. In other regions, however, fiber-optic backhaul stood at just 6.6% in Sub-Saharan Africa, and even in Europe it stood at just 16%. Microwave solutions that support high and low band channels (e.g., a 23 GHz channel with an E-Band (70/80 GHz) channel boost data throughput and assure communication links in the event of rain fade) and microwave solutions in the millimeter range (> 30 GHz, such as the E-Band and V-Band) will be robust enough to support 4.5G and even 5G applications. Nevertheless, for truly cloud-native, ultra-low latency applications, fiber-optic backhaul will be the optimum solution.

Renewed regulatory effort will be needed to prime fiber-optic deployment. Furthermore, this regulatory stimulus will need to be multi-agency. The telecommunications regulator will need to coordinate efforts with the utilities regulator, as well as national and local governments. Telco conduits intersecting the cities, and inter-city, will need to be enlarged and bifurcate into additional commercial and residential neighborhoods. Gaining viable commercial access to water pipe, sewage, and electrical pole and pylon rights of way needs to be simplified and have a fair and consistent cost structure.

The number of basestations will grow from 11.8 million in 2017 to 18.5 million in 2025. Much of the growth will come from small cell deployments (4.3 million installations by 2025) that help densify coverage in residential and commercial environments. Interestingly, fiber-optic provisioning of mobile cellular basestations can act as a springboard for enabling fiber-optic access for residential homes and commercial premises in the vicinity of the cell site, making it a win-win scenario for the mobile service provider and the wider community.

5G is coming fast, but we need to address the upstream issues in time.

** The commentary in this Executive Foresight is based on a presentation (Global Tier 1 5G Deployments and X-Hauling) that Jake Saunders delivered at the Future Broadband Forum at the Mobile Word Congress Shanghai 2018 event.