WCA July 2009

“We have observed a movement towards backhaul as a managed service,” said ABI’s Ms Manjaro. “This enables mobile operators to focus on their core business while guaranteeing a backhaul capacity matched to their changing traffic demands.” With telecom demand surging, Kenya promotes – and safeguards – its lines of communication The government of Kenya is con- sidering measures that would bring down the price of computer hardware, facilitating Internet access in advance of the mid-year commissioning of an undersea high-speed fibre optic cable. The $130 million East African Marine Cable, which will link Mombasa, on the coast of Kenya, with Fujairah in the United Arab Emirates, is in an area menaced by sea pirates. In March, a government official said the projected route of the cable had been shifted some 125 miles as a safety precaution. But Kenya’s Information and Communications Minister Samuel Poghisio said in a statement 16 th April that the 3,100-mile cable was on schedule for completion in June. This year’s government budget includes an item that would make the benefits of computer technology available to more Kenyans. Finance Minister Uhuru Kenyatta said, “The [stimulus package] will also enable telecommunication companies to expand across the country and make their services more affordable.” The number of mobile phone subscribers in Kenya grew by 1.7 million in the fourth quarter of last year, according to the Communication Commission. Official data also indicate that total subscribers grew from 11.3 million in 2007 to 16.2 million in 2008. As an example of of the new communications emphasis, Telkom Kenya has launched a service that will enable organisations to exchange data more securely among sites almost anywhere in Kenya. As reported in the Nairobi Standard (18 th April), an execu- tive of the firm said Orange Business Services is offering a one-stop communication package – a virtual private network – that includes mobile and fixed phone, network systems, video services, and data solutions on one platform. Telkom Kenya is the sole provider of landline phone services in the country.

Wireless backhaul expansion continues unabated, is even seen as intensifying

The advent of 4G challenges US carriers to solve the last-generation lag With its beguiling touch screen, computer-like display, and Wi-Fi capa- bility, the iPhone from Apple was a smash hit with customers even before its introduction, in June 2007. And the phone retains its hold on a dedicated band of owners. But, for many frustrated users in cities across the US, the powerful device is hobbled by inconsistent service from the nation’s wireless operators. Writing in the New York Times , Matt Richtel reported that iPhone owners complain of continual ‘hiccups’, particularly in certain cities. He recounted the experience of a visitor to New York from San Francisco, whose iPhone “couldn’t hang on to the network” in Manhattan. This made it difficult even to use the map function to get directions, and the California resident rated the coverage far inferior to what he receives at home. (“3G Phones Exposing Networks’ Last-Gen Technology,” 14 th March). This customer had upgraded in January from a second-generation (2G) iPhone to the 3G version. And here, according to Mr Richtel, is the locus of the problem. It also foreshadows the broader technical challenges awaiting all carriers as they move to the higher-speed networks – both 3G and, soon, 4G. Industry observers consulted by the Times fault the ‘complex quilt’ of the nation’s wireless networks. Mr Richtel wrote, “The major mobile carriers have spent tens of billions of dollars on new voice and data networks that they advertise as superfast wireless express lanes. But analysts say these upgrades present major engineering challenges, and the networks often underperform.” While acknowledging some disappointment on the part of some users, AT&T, the exclusive carrier for the iPhone in the US, claims that improvements in its network provide an example of ‘extraordinary’ recent advances in wireless service achieved by the industry. But the company is doing more. On 10 th March, it announced plans to invest some $11 billion this year to expand and improve its wireless and broadband networks.

Worldwide revenues from backhaul leasing are expected to double over the ensuing 30 months, according to a study published 15 th April by ABI Research. The global-connectivity research and advisory firm expects the growth curve even to accelerate after 2012, for a five-fold revenue increase between 2009 and 2014. A backhaul network includes the lines that connect a provider’s towers or cell sites to one or more cellular telephone switching offices, long-distance providers, or a public switched telephone network. According to ABI Research senior analyst Nadine Manjaro, the main driver of this powerful performance will be the effort by mobile operators to prepare for an upgrade to LTE (long term evolution). “Operators might not deploy LTE immediately,” she said. “But they know that, before they do, they’ll have to upgrade their backhaul capacity.” Describing backhaul as a potential bottleneck to a satisfactory 3G experience, ABI Research expects wireless network traffic to surge as iPhone and other phone-media- Internet devices become the norm, and laptop PC card usage increases. Ms Manjaro noted that AT&T Mobility, the service provider for the iPhone, “has found that one iPhone user typically generates as much data traffic as 30 basic-feature phone users.” Another indicator of higher revenues from backhaul leasing is the growing capital expenditure on microwave backhaul, which ABI Research sees as exceeding $8.5 billion in 2009. The market opportunities generated by this growth in backhaul are spread around the backhaul equipment vendors and fixed line operators. In the company’s view, some backhaul infrastructure vendors (Ericsson, Alcatel-Lucent, and Nokia Siemens Network, among them) will benefit from the operators’ strong interest in Carrier Ethernet solutions. Major microwave equipment vendors, like Dragon Wave and Harris Stratex, will also benefit from increased microwave adoption. And fixed-line operators – such as BT, Embarq, AT&T, and Verizon Communications – will develop new revenue streams by providing leased backhaul services. Even the business models for backhaul are in flux.

24

Wire & Cable ASIA – July/August 2009