Extending 3G and 4G Coverage To Remote And Rural Areas Solving The Backhaul Conundrum

Extending 3G and 4G Coverage To Remote And Rural Areas Solving The Backhaul Conundrum

After a decade of domination by GSM standard 2nd generation (2G) mobile phone networks, the world has embraced 3rd generation technology (3G) and is now starting to move towards 4G/LTE systems, even in remote and rural areas. 2G systems laid a broad foundation for extending voice communication to the vast majority of the world s population. Yet 3G and 4G hold even greater promise, enabling mobile operators to deliver both voice and data connectivity to subscribers and greatly expand their revenue potential. Specifically, 3G and 4G technology provides a more profitable path to serving rural subscribers in both developing and developed countries. For many of these customers, 3G/4G service represents the most affordable access to highspeed Internet connectivity, sometimes even the only access. According to the International Telecommunication Union (ITU), only 16% of the population in Africa has Internet access and only 7% of households. In the future, Internet access will primarily be through smart phones, and this represents a significant opportunity for mobile operators. ITU also noted that Mobile-broadband subscriptions have climbed from 268 million in 2007, to 2.1 billion in 2013 reflecting an average growth rate of 40%. And in Africa, over the past three years mobile broadband penetration has increased from 2% in 2010 to 11% in 2013. So what s stopping mobile operators from pursuing rural opportunities? One key challenge is how to backhaul rural network traffic in a way that makes it affordable for mobile operators to extend their service. Fortunately, 3G/4G operators can look to recent progress in the development of new satellite technologies for similar growth. This paper will examine how 3G/4G operators can leverage several parallel trends falling infrastructure costs, the transition to IP and advancements in satellite backhaul technology to reach the rural market.

How 2G Operators Cracked the Rural Market Through Satellite Backhaul While satellite systems have been used for many years to backhaul 2G Base Transceiver Station (BTS) traffic in extremely remote locations, the market did not open significantly until recent technology innovations changed the economics. The traditional approach relied on a technology called SCPC (Single Channel Per Carrier). This technology extends an E1 (or T1) fractional link from the Base Station Controller (BSC) site to the BTS using a pair of devices called SCPC modems. It was a simple solution, and good for sites that had a high level of traffic, but was operationally inefficient for many locations, especially smaller sites. It is also inefficient for handling data traffic since that traffic tends to be peaky. With SCPC the satellite link was treated as though it was an extremely long microwave hop that happened to pass via a satellite. The inefficiency comes from the fact that the capacity of the satellite link between these two modems has to be configured for peak usage which typically occurs for only a few hours on the busiest day of the year. The rest of the time there is unused capacity that has to be paid for. Since satellite bandwidth is usually the most expensive element in budgeting for a remote base station, wasting capacity is not a good value proposition. Satellite backhaul over an SCPC network made sense when there was enough network traffic to justify a dedicated link, and several mobile operators did deploy SCPC networks to reach the remote and rural market. But many of these potential sites had populations that were simply too small and could not generate the traffic to justify the build out so they have been left without service. While alternatives to satellite exist they have distinct economic and technical limitations for connecting remote and rural locations. Fiber: Extending fiber networks into remote and rural areas is not a feasible option as it comes with a very high capital cost and a long lead time. Fiber installation costs and dark fiber rental costs vary enormously, but if a new build of tens of kilometers is needed to hook up a base station to an existing fiber network the delay and capex cost make it unlikely to be economically feasible. Microwave networks: Microwave links are similarly problematic for remote sites. Depending on the terrain a relay tower might be needed every 20 50 kilometers, complete with land acquisition, power supply and equipment. If there is no population close to the relay sites then these just add to the capital cost and complexity of the solution. Unlike fiber, an increase in capacity requirements, for example migrating from 3G to 3G+ HSPA will likely require replacement of equipment at all intermediate sites fiber would typically only require the end points to be upgraded. The time to acquire and build the relay sites may take years and the effort and cost is effectively doubled if route diversity is required to meet link availability targets. Any link requiring more than four intermediate relays is certain to require diversity to meet typical SLAs. Figure 1: Comparison of per-site bandwidth usage under SCPC and TDMA systems 3

Leased lines: In the case of leased lines essentially the same problems apply as for the first two points except that the PTT will have to undertake the network build instead of the operator. Likely at least some of the build costs will be charged back to the operator and there will then be an ongoing leased line charge to pay, normally related to distance and speed. The mobile operator can expect a very long delay in the build-out and in this case has the extra disadvantage that the planning and deployment is outside his control. In the long term the reliability is also outside the mobile operators control and may become an issue. The fundamental shift in the market began when the mobile operators started to deploy IP networks to improve efficiency and management of their voice and data networks. Until the mid 2000s all 2G mobile networks used Time Division Multiplexed (TDM) E1/T1 links both in their core networks and also for the base station backhaul links. These were ideally suited to microwave and other fixed bandwidth link technologies. Starting around 2005 the amount of data traffic in mobile networks became more important starting a gradual migration towards the use of IP technology. While TDM is well suited to voice traffic it is highly inefficient for data traffic which is almost always highly peaky. This characteristic makes data traffic a much better fit for IP networks where the capacity can be shared between multiple sites rather than having a fixed amount per site as in a TDM network. The move from TDM to IP was also mirrored in the satellite industry where new, all IP based, satellite networks were impacting the way satellite services were being managed and deployed. These satellite networks use a concept called TDMA (Time Division Multiple Access) to share the bandwidth across many sites allocating bandwidth on demand, based on the real-time requirements at each site. This flexibility is exactly what is needed in an IP environment. Bandwidth allocation can literally start and stop with each sentence that is spoken or block of data sent or received. The trunking gain achieved by this pooling of bandwidth can be dramatic compared to SCPC with up to 80% less capacity required on a per site basis. With the introduction of IP-based TDMA technology, mobile operators found a more economical way to backhaul data using satellite systems. And today, 2G mobile operators have extended their service through satellite backhaul to thousands of remote and rural sites (See Figure 2). Figure 2: With TDMA many remote sites share the same satellite carrier, allocating capacity according to real-time needs 4

Will Satellite Backhaul Work With 3G/4G? Increasing Data Usage and Technology Evolution Make the Case Even Stronger With the adoption of 3G/4G networks, the use of mobile data has grown exponentially and overtaken voice as the primary application being used on mobile communication devices. But can the satellite model for 2G backhaul be used for 3G/4G networks? The answer is that satellite backhaul is even more relevant to 3G/4G than 2G because the newer satellite systems are primarily designed for IP data traffic. This makes them highly compatible with 3G networks, especially Release 8, though satellite works successfully R5 as well. See the appendix of this paper for a more detailed analysis on the different 3G standards and LTE over satellite. Satellite has also been successfully deployed using the S1 interface to connect 4G LTE enodebs. The satellite industry and mobile vendors have both introduced several technical innovations that make backhaul over VSAT a sound choice for handling data and IP traffic on 3G/4G mobile networks. Four main innovations are making a direct impact on the business case for supporting 3G/4G: 1. DVB-S2 with ACM 2. TDMA and SCPC on a single platform 3. High Throughput Satellites 4. Small Cells TDMA networks specifically are dramatically faster and more efficient since the move to the second generation of the Digital Video Broadcasting standard, or DVB-S2. Most satellite hardware vendors continue to deploy DVB-S2 systems using the broadcast profile of DVB-S2, which is far from optimal for interactive VSAT Systems encapsulating IP data within MPEG frames. idirect, on the other hand, has tuned every aspect of its DVB-S2 implementation for the efficient delivery of IP data across satellite networks, while still remaining 100 percent compliant with the DVB-S2 specification. This means the most efficient handling of IP traffic possible over a satellite connection. Along with DVB-S2 came a technology called Adaptive Coding and Modulation (ACM), which addresses the long standing challenge of rain fade. idirect s implementation of ACM enables each remote to operate at its most efficient coding and modulation scheme at any moment in time, depending on its location within the satellite contour, antenna size and atmospheric conditions. ACM not only optimizes the bandwidth efficiency for maximum throughput on a remote-byremote basis but also ensures uninterrupted service by automatically adjusting to maintain connectivity, even in regions prone to deep and sudden rain fade. Another recent innovation, introduced by idirect, is the integration of TDMA and SCPC onto a single networking platform. While we described SCPC technology earlier as essentially a legacy system, there are some circumstances where it has a role to play. For the majority of cellular sites traffic is variable, changing second by second as conversations and data browsing starts and stops. For this reason TDMA is clearly a winner because of the statistical multiplexing effect, the same reason that drives operators to choose IP networking as replacement for TDM multiplexing in their transmission networks. However, some links remain at a fairly constant capacity where they are saturated by design or due to other constraints, for example having no more RF spectrum available for handling calls and no possibility to add further cell sites to increase capacity. Today, idirect TDMA networks can support links up to 50 Mbit/s outbound and 20 Mbit/s inbound so the need for speed is no longer a reason to use SCPC. Figure 3: Shared TDMA carriers used for variable traffic volumes; SCPC used for steady traffic volumes TDMA Shared Return SCPC Return 3G Core 5

In these circumstances, the idirect system can switch a standard Evolution series remote to become an SCPC Return terminal. This is done with a few clicks of a mouse in the Network Management System. This flexibility allows an operator to change a remote between SCPC and TDMA as often as they like, for example day and night, or during the tourist season for a site at a resort. This also provides an operator the ability to start with a very small variable throughput at a remote site and then switch to a dedicated connection when a site grows and has the business justification for needing SCPC. Rather than having to send a team to physically swap a remote modem this can be done centrally with the same hardware still in the field. This means a single satellite network can deliver both types of connectivity and adapt as mobile operators add subscribers and resulting traffic to their networks. Clearly, having a single network technology that can deliver both types of service leads to many types of savings such as having a single NMS staff and having only one set of training and spares. The third innovation is the development and launching of high throughput satellites (HTS) in Ka- and Ku-band by the majority of large satellite operators. This will impact the mobile industry by bringing more capacity, at a lower cost to many of the markets where coverage is a challenge. This is important as satellite bandwidth is the most expensive aspect of a satellite solution, so lowering the cost will make it a more viable solution for remote and rural areas. The latest research from Euroconsult shows that bandwidth price remains an important factor in the buying decision of mobile operators, as it comprises 70-80% of the total backhaul solution cost. Estimates suggest that HTS operators will be able to offer bandwidth at one third of the price, making it economically feasible for mobile operators to expand 3G coverage to all areas that have demand. Furthermore, the influx of new HTS capacity will bring down the price of traditional Ku- and C-band satellite capacity, making traditional satellite backhaul more affordable. When it comes to dollars, the cost of satellite capacity is directly related to the amount of capacity that a satellite can provide versus the cost of building and launching the satellite, as well as the expected lifetime of the satellite. The cost of building and launching satellites has not dropped significantly over the years, so the only viable strategy that an operator can use to lower capacity cost is to increase the amount of capacity on a single satellite. Ka-band is a new area for growth in the satellite industry as the ITU has allocated 1 GHz of bandwidth to the commercial and 1 GHz to the military satellite markets. Based on new features like DVB-S2 and ACM on the outbound as well as adaptive techniques on the inbound operators now have ways to overcome issues like rain fade that have impacted higher spectrum bands in the past. This is only part of the story as much of the benefit of HTS is the ability to increase capacity using numerous small spot beams that allow for more powerful satellite coverage which can lead to the reduction in the size of ground-based antenna and RF equipment. Similar to concepts being deployed in the mobile industry to handle bandwidth constraints, spot beam satellites enable frequency reuse exponentially expanding the capacity provided by a single satellite. The fourth key development that is impacting the deployment of 3G/4G networks is the introduction of new products into the mobile market derived from small cell technology. While small cells have primarily been used by mobile operators as a way of offloading data from the wireless network to the terrestrial network they also have the ability to cost effectively expand the service area for an operator. Firms such as Altobridge have built outdoor platforms capable of integrating several small cell platforms, combined with power amplifiers, power supplies and outdoor enclosures to produce packages that can support 30 voice calls plus HSPA data traffic and backhaul that traffic efficiently using in-built compression and optimization technology. The prices of these packages can be much lower than those from traditional macrocell vendors and combined with a satellite remote router can deliver a rapid and economic build-out of 3G/4G coverage in rural areas. The same vendors are challenging the traditional mobile vendors with new systems that incorporate the entire 3G/4G core network on the same server platform that hosts the small cells. The effect of this is to release mobile operators from the need to operate large and extremely expensive proprietary 3G/4G core networks and replace them with much lower cost soft-switches. These devices allow scaling to much smaller networks even to allow entirely separate networks to be operated in a building, ship or aircraft. The introduction of small cell technology is a game changer specifically in developed nations. It clears a path for mobile operators to extend data service to rural customers, where accessing the Internet over a mobile device can be significantly cheaper and more convenient than computer-based Internet access. Not surprisingly, mobile operators who have already invested in small cell gateways to link home and office based small cells to their core networks are extremely interested in leveraging this same investment for rural coverage and metro fill-in. Making the 3G Business Case for Satellite Backhaul With 2G success as a model, how can 3G/4G operators make the business case for expanding into remote and rural markets through satellite backhaul? There are a number of business factors that need to be considered. How do you plan to expand your customer base? Is coverage area inhibiting your current growth? Can you be first to 6

market in new regions? Will expanded coverage lower customer churn? Will my other technology options allow me to expand my coverage quickly and cost effectively? These are all important factors that drive operators to choose to deploy satellite in their cellular network. Let s examine the typical capital and operating costs associated with satellite backhaul and the typical ROI a mobile operator can expect. Hardware costs When it comes to the cost of a satellite network there are two main variables that are crucial: the cost of the equipment and the satellite bandwidth required to support the service. In a TDMA network, the satellite equipment costs comprise the hub system located typically at or close to a mobile switching center and the remote routers that are located at the base station (Node B or enodeb in 3G/4G terms) sites. There are many other variables will the system be shared with other services, the size of the hub and remote antennas (which in turn depends on the satellite chosen and the bandwidth required) etc. However for a network of a few hundred sites we could estimate the total cost for both hub and remote equipment at $3,000 - $6,000 per site typically less than the cost of most microwave links. In a typical SCPC network, each remote operates individually without a centralized hub. From a capex perspective, this makes each remote site more expensive, but you eliminate the cost of the central hub. However the cost of SCPC modems is typically around two or three times that of TDMA systems and hence once the cost of a TDMA hub has been amortized across perhaps as few as twenty sites the capital cost for TDMA is lower. As mentioned above, the use of small cells is really opening up a new opportunity for mobile operators to support customers in remote and rural areas. The capex required for installing a small cell that will cover a small town or village is much less than needed for a typical macro cell. For a small cell deployment you need three main things, a site, power and backhaul. Small cells typically require much less electricity and can be easily attached to an existing structure without the need for a tower to be built. Combine that with a cost effective satellite solution that can scale to hundreds or thousands of sites and the opportunity for covering remote areas cost effectively has greatly increased. Operating costs The largest opex cost of any satellite network is the monthly bandwidth cost to support the service. For this reason the development of new technologies that maximize the efficiency of bandwidth has been crucial to help mobile operators justify their investment. As mentioned earlier an SCPC satellite link between two modems has to be configured for peak usage, which usually only occurs for a few hours of each day. This means that an operator will need to allocate a fixed amount of bandwidth per site based on the most pessimistic case. Outside of peak usage there is unused capacity that is sitting idle. This wasted bandwidth is not being re-used, and is an expense to the operator that is not being recouped. When using a TDMA satellite system, such as the idirect Evolution system, the bandwidth cost is directly related to the peak requirement for IP bandwidth across the whole network. This can be derived from the individual 3G/4G remote base station busy hour traffic figures, but isn t as simple as just adding them all up as the busy hours usually occur at different times for different sites, due to local factors and random statistical behavior. We generally find that this decorrelation of busy hours means that the peak bandwidth required is 10%-15% less than the simple sum of all the bandwidths, which is what you would see in an SCPC satellite solution. This is over and above the typical 50% trunking gain derived from pooling all bandwidth into one dynamically allocated resource pool. idirect has tools designed to help operators make these calculations to determine the impact on their network. After making the calculation and getting the peak bandwidth (in Mbit/s) the amount of satellite bandwidth (in MHz) can be calculated to determine the amount of traffic that can be supported on the network. Moving forward, idirect can now support TDMA and SCPC traffic on the same network. This means that an operator can deploy a satellite solution at a remote site and only allocate a very small amount of bandwidth as necessary to enable connectivity at that location. As traffic increases or subscriber numbers in that area grow and the throughput on that particular Node B requires it, you can change the remote satellite router from operating in TDMA mode to a dedicated SCPC link. For an operator this means that they have saved on bandwidth expenses to launch the service with TDMA, and can move to SCPC at locations where a high level of traffic requires a dedicated link. The other area where this will help from a savings perspective is that no physical swap of equipment will be needed at the remote site. The transition from TDMA to SCPC is centrally managed and can be done without any support in the field. Savings are also realized in the fact that a mobile operator will not need two separate networks as many use today for both shared TDMA traffic and dedicated SCPC traffic. This will also provide opex savings as your personnel will only need to manage and maintain a single network. 7

Sample Business Cases for Deploying 3G/4G Networks Over VSAT Let s review two sample business cases that depict typical costs for extending cellular service to remote and rural areas using satellite backhaul, as well as expected revenue gains. These business cases are based on current pricing and extensive research on deployed networks. Inputs Cost per Site Cost Site Revenues per Site Business Case 1: Extending cellular coverage to the MEA market using Ku-band satellite backhaul and macro cell infrastructure As you can see from the chart above, a 3G mobile operator can expect to net more than $75,000 in annual revenue by serving an individual site with a population of 1,000 subscribers. It s likely that an operator in the MEA region may be able to serve 5000 such sites within a mid-sized country (Kenya for example). This would total more than $3.75million in annual revenue. Current research on 2G deployments confirms these projections. Business Case 2: Extending cellular coverage to the European market using Ku-band satellite backhaul and small cell infrastructure An emerging application for satellite backhaul is extending the reach of 3G+ networks to the small cross-roads towns that are still not connected with 3G or with terrestrial ADSL or cable technology. The example business case above shows that mobile operators may be able to gain more than $170,000 in annual revenue by serving a 300-subscriber site with small cell fill-in. In a country like the UK, an operator might have 1,000 sites in a network, which could lead to $170 million in revenue. In a larger country like the U.S., an operator may be able to serve 10,000 sites, with nearly $2 billion in potential revenue at play. 8

Conclusion There is a market for 3G/4G connectivity using satellite in fact satellite is the ideal medium to reach the remote and rural sites that are the key areas needing coverage with 3G/4G. The population in rural and remote areas will use 3G/4G as their primary means of accessing the Internet and gaining the economic and social benefits that go with having this access. The evolution of 3G/4G standards can all be supported over satellite (see appendix), and newer releases have the clear advantage of being able to route traffic according to type. While early satellite technologies used for 2G networks used inefficient SCPC technologies, new developments in IP based satellite systems means that they can economically provide efficient 3G/4G backhaul today. The flexibility of the idirect 5IF hub system allows an operator to use new HTS satellites as well as different bands to reach different types of remote base stations as new systems evolve. This flexibility extends to allowing an operator to change the access method from TDMA to SCPC or vice versa as traffic patterns change over time, thus always using the best available technology and not being constrained by legacy equipment. The combination of lower cost highly efficient satellite backhaul with the new generations of highly economic 3G/4G base stations makes the business case for rolling out 3G/4G to remote and rural areas a clear winner. For more information on mobile backhaul over satellite visit www.idirect.net/mobile. [See Appendix on next page] 9

Appendix Does Satellite Work for All 3G Releases and 4G/LTE? In principle, 3G/4G traffic should be as simple to backhaul using satellite links as 2G. But as in the case of 2G, not all mobile protocols are the same when it comes to performance. When it comes to 3G there are several different generations of standards that need to be evaluated, but these can be segmented into two main categories, both corresponding to an evolution in the requirements to support higher and higher data speeds. Release 5 3GPP R5 used IP as the transport protocol. This makes it possible to connect such base stations directly to an IP based satellite system such as the idirect platform. However, the protocols used to carry the voice and data are still essentially closed. The 3G data is now encapsulated inside IP packets, but the data itself remains wrapped inside the 3G protocol layers. This means that routers or other components in the data path in cellular networks cannot easily be aware of the type of traffic they are passing. At the IP level all the traffic is wrapped up in 3G protocols whether it is voice, data or video. The effect of this is that the overall speed of connection over IP carried on satellite is still dependent on the efficiency of the 3G protocols operating over a high latency IP link and with higher levels of jitter than are normally found on terrestrial networks. idirect has worked with specific market leading vendors to help them understand the impact of satellite transport on their 3G products and the vendors have been able to tune or modify their protocols to work effectively with the characteristics of satellite circuits. We are able to report successful trials showing multi-megabit throughput with directly connected 3G R5 Node Bs connected to their RNCs via idirect networks. 3GPP Release 5 carrying traffic in TCP/IP but still wrapped in GTP HTML HTTP HTML TCP/IP PAY LOAD NODE B R4/5 3G GTP PAY LOAD IP/UDP PAY LOAD 10

Release 8 The latest generation of 3G base stations supports 3GPP Release 8 of the UMTS standards. This has the ability to integrate the RNC functionality into the Node B. The important effect of this is that now data traffic can enter and leave the Node B in its native form. For example, if a user connects his handset to a web page using HTTP over TCP/IP that traffic now leaves the base station as a TCP/IP session carrying HTTP. This has all sorts of beneficial implications for the mobile network operator. He can now choose to treat different types of data in different ways to compress certain web pages using web optimizers, to route certain traffic via a terrestrial link even an ADSL link while keeping other traffic on his own network. In terms of satellite backhaul the importance is that the native traffic can be routed efficiently over a satellite router that incorporates TCP/ IP spoofing and use other techniques that avoid the slow-start effect of operating TCP/IP over a higher latency satellite link. Throughputs of tens of megabits/s become possible and the user experience over satellite is not substantially different from that using a terrestrially connected base station. 3GPP release 8 onwards - traffic egress as native TCP/IP HTML TCP/IP HTTP PAY LOAD HTML NODE B R8+ Release 8 onwards allows the full benefits of TCP spoofing, acceleration, local switching and multicast content distribution NODE B R8+ TDMA/SCPC MULTICAST MUSIC/IPTV 3G CORE NETWORK GQOS PRIORITIZE RTTM ACCELER. SPOOFING VOIP/SIP MUSIC/ IPTV DATA/WEB idirect Router SOFT SWITCH 11

4G/LTE A quick look at the LTE protocol stack shows that while between the UE (User Equipment, i.e. the handset) TCP/UDP traffic is wrapped up in LTE specific radio protocols once it arrives at the enodeb it is unwrapped and re-wrapped in GTP (GPRS Tunneling Protocol) which is then carried over UDP back to the core network over the S1 interface. It is this S1 interface that is most commonly carried over satellite networks enabling the installation of enodebs in remote and rural locations. 12

Certain implementations of enodebs may allow for local data break-out so that the native TCP/UDP traffic can be sent directly to the internet, for example via an ADSL line. If this is available, then this traffic can then be accelerated and spoofed by a satellite remote to give optimal performance. Unfortunately, very few regulatory regimes permit the use of this data off-load since it makes Lawful Intercept hard to realize. Therefore the most common case will be the transport of LTE data traffic encapsulated in GTP over UDP over IP, the same way it is done for 3G traffic. This means the traffic can t be accelerated or spoofed and so each user TCP session will be limited to a maximum throughput of around 1 Mbit/s over satellite due to throttling by the TCP flow control algorithm. Initial tests and early deployments of LTE over satellite have shown no particular problems. As expected some adjustments to timers and counters may need to happen on the mobile equipment to allow for the much longer latency over satellite compared to terrestrial backhaul but this has not proven to be a problem in practice. So why would an operator deploy LTE over satellite? As for 2G and 3G there are several use cases: 1. Remote and Rural locations outside the reach of terrestrial fiber or microwave. 2. In locations that are mobile including ships, planes, trains. 3. To cover special events or disaster coverage typically mounted on Cells On Wheels (COWs). 4. To provide temporary coverage during roll-out where base stations need to be built but the backhaul infrastructure is not yet available. 5. To provide data capacity to sites that are already covered with satisfactory voice coverage and are being upgraded with a data overlay network. In all these cases the latest idirect TDMA technology is able to support both low/medium speed backhaul for rural and remote sites using remotes such as the X1 Outdoor at speeds up to 12 Mbit/s downlink and 3 Mbit/s uplink. For higher speed enodebs the X7 provides throughput up to 50 Mbit/s down, 20 Mbit/s up plus the possibility of a high speed multicast overlay. The only question is the economic viability of such large capacity sites and the development of HTS is rapidly helping to address this issue. 13

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