Bluwan total cost of ownership calculations find that:

- Fibre backhaul costs are three times that of millimetre wave Point to Multipoint

- Point to Point microwave backhaul is twice that of millimetre wave Point to Multipoint

BARCELONA, Spain, Mobile World Congress – February 28th, 2012: As mobile data consumption continues to rise, small cells are undoubtedly the solution. However, the cost implications of backhauling small cells to support this growth have not been fully considered. Bluwan, a provider of carrier-grade multi-gigabit wireless solutions, today revealed analysis that demonstrates the CAPEX and OPEX associated with small cell backhaul deployments, which includes analysis of millimetre wave Point to Multipoint (PMP), wireless Point to Point (PTP) and fibre backhaul solutions, over a five year period.

The analysis considers the CAPEX costs associated with the initial deployment of infrastructure equipment, and on-going OPEX costs associated with site rental and maintenance, installation, spectrum licensing and wholesale fibre rental. It also includes conservative estimates for the cost of transmission equipment as well as realistic considerations for the expenses of fibre “trenching” (the cost associate with the digging of roads and installation of ducts to carry fibre cable).

Overall, calculations demonstrate that fibre is by far the most expensive small cell backhaul option. Over a five year period the total cost of ownership (TCO) of fibre backhaul is three times that of millimetre wave PMP, and one and a half times that of wireless PTP. This is largely attributed to the requirement to trench fibre to each greenfield cell site, and the cost of bandwidth rental from wholesale providers.

Similarly, wireless PTP proves to be almost twice as expensive as millimetre wave PMP over the same five year period. This is attributed to the amount of equipment required for each cell link, soaring total OPEX for third party site rental agreements, and the higher spectrum licensing costs for PTP (operating in the 6-38GHz band) versus millimetre wave PMP (operating in the 42GHz band).

Most significantly, while CAPEX spend in the first year for both wireless solutions are roughly comparable (fibre CAPEX is more than triple that of wireless solutions), OPEX requirement for wireless PTP is more than two and a half times greater than millimetre wave PMP. While the CAPEX requirement drops over five year period, OPEX costs accumulate, adding significantly to the Total Cost of Ownership.

All costs are calculated based on a set of fixed parameters – see editors’ note below.
“This analysis clearly demonstrates that it is more than just the cost of the equipment that needs to be considered for small cell backhaul deployments. With savings of up to 200 per cent, operators need to take the full cost of ownership into consideration, especially in dense urban environments,” says Shayan Sanyal, Chief Commercial Officer at Bluwan. “It is the outstanding, continuing costs - such as spectrum licensing, operating costs and site rental - that make the most difference and it is in helping to reduce these that operators can make the greatest gains. Operators cannot ignore these variables.”