Sprint is exploring a major shift in the way wireless service is delivered as it works to upgrade its network while implementing cost cuts throughout the company. One of the biggest costs associated with small cell deployments is backhaul, the connection that brings mobile network traffic from the cell sites back to the core network. Sprint wants to reduce this cost for a number of sites by using wireless backhaul.
“Backhaul is really very much a function of the way we want to engineer the network,” said Sprint CFO Tarek Robbiati recently at Deutsche Bank’s Media, Internet and Telecom conference. “We are going to densify the network … but as part of the densification we are rethinking our backhaul strategy and that is all around using a mix of Ethernet, fiber and wireless backhaul to keep our costs down.”
Carriers have used line-of-sight wireless backhaul before, often in rural settings where fiber is not available. Sprint has said it wants to deploy tens of thousands of small cells, and it seems likely that many targeted locations will not be fiber-fed. Running fiber to the sites would add significantly to the cost of each deployment. Wireless backhaul could save Sprint more than $1 billion per year, according to analyst Walter Piecyk of BTIG Research.
“Sprint could save $600 million to $1.2 billion of incremental annual network expense by using wireless instead of fiber,” Piecyk wrote in a research note, explaining those numbers by assuming traditional backhaul would cost $1,000 per month and Sprint would need backhaul for 50,000 to 100,000 small cells.
But so far there have been very few reports of actual small cell deployments by Sprint. Guided by its Japanese parent SoftBank, the carrier is playing its cards close to the vest as it repurposes the 2.5 GHz spectrum that was previously used for Sprint’s defunct WiMAX network.
One big question is what equipment vendor Sprint could turn to for a wireless backhaul solution. The answer may come from Japan, where SoftBank has been trialling small cell technologies with Florida company Airspan. The two companies trialled coordinated multipoint technology for LTE small cells, and said the implementation “will be supported over Airspan’s wireless IBridge backhaul solutions.”
Airspan already has a product called AirSynergy designed to support wireless backhaul. The company did not respond to requests for information about its products or its relationship with Sprint. Sprint also declined to comment on its vendor choices.
BTIG’s Piecyk said a radio that enables wireless backhaul should allow Sprint to dedicate some of its 2.5 GHz spectrum to backhaul, and unlike most other carriers, Sprint has enough spectrum to do this. Piecyk said in addition to reducing Sprint’s costs, wireless backhaul should speed time-to-market for Sprint’s small cells.
“From Sprint’s standpoint, if I’m going to put tens of thousands of small cells in, it takes time to get the telephone company or the cable company or Zayo or Crown Castle or whoever it is to get fiber or some type of fixed connection,” Piecyk said, adding if network traffic increases Sprint will need fiber backhaul to support the additional traffic. But for now he thinks wireless backhaul could be a smart move.
“It will allow them to get the network up, get the heart started and deliver those speeds to the customers,” Piecyk said.
Analysts think Sprint’s network has the potential to live up to its name and they are seeing pockets of progress.
Roger Entner of Recon Analytics has said Sprint already offers faster connections than its competitors in markets where Sprint Spark has been deployed. Entner thinks network speed will be a major focus for Sprint this year.
But Sprint’s focus on network speed has to be balanced with its ongoing drive to cut costs. The carrier has more than $30 billion in debt, and has not turned a profit since 2014, when it briefly broke a six-year losing streak before sliding into the red again.
“Priority No. 1 is cost takeout,” Robbiati said at the Deutsche Bank conference. “No. 2 is cost takeout, No. 3 is cost takeout. In case you haven’t heard it, the top priority is cost takeout. That’s what we are focused on right now, it’s what the company requires.”
Image source: Airspan website
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