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TMCNet:  Global Backhaul Investment Gap of $9.2 Billion could increase Customer Churn

[February 25, 2013]

Global Backhaul Investment Gap of $9.2 Billion could increase Customer Churn

BARCELONA, Spain, Feb. 25, 2013 /PRNewswire via COMTEX/ -- Mobile World Congress - Tellabs recently released findings from the sponsored Strategy Analytics report 'Future Backhaul Requirements for Complex Mobile Networks' and an associated article 'Closing the Backhaul Gap' that indicates a serious global 'Backhaul Investment Gap.' (Photo: http://photos.prnewswire.com/prnh/20130225/NE65875 )(Logo: http://photos.prnewswire.com/prnh/20130207/NE56457LOGO-b ) The report predicts that as global mobile data traffic grows by another 5 to 6 times over the next five years operators will face a new mobile capacity crunch by 2017 unless they increase traditional backhaul investment levels to match the anticipated growth in Radio Access Networks (RAN) capacity and user traffic.

The potential 16 petabyte shortfall in backhaul capacity represents a $9.2 billion global mobile backhaul funding gap.

That 'Backhaul Gap' could lead to customer churn since up to half of network performance problems for mobile operators may stem from backhaul network congestion. There is an opportunity for mobile operators to differentiate themselves significantly from competitors by investing in smart backhaul.

"As many as 40 percent of mobile users list poor network performance as a key reason for leaving an operator," noted Phil Kendall, Director Wireless Operator Strategies. "For each $1 that operators invest above the 17.5 percent of Total Cost of Operations (TCO) that is spent today, operators could recapture up to $4 in revenue that would otherwise be lost." See the Chart.

"To optimize the required investment and handle the traffic throughput for new RAN we need backhaul solutions that are both smarter and more cost effective," added Sue Rudd Director, Service Provider Analysis. "New smart Backhaul systems must incorporate upper layer service awareness to guarantee customer Quality of Experience (QoE) support for LTE signaling, synchronization for packet Ethernet and Cloud RAN control. These requirements can only be delivered cost efficiently by new pro-active intelligent network management, Self-Organizing Networks (SON) and Software Defined Networks (SDN) that optimize backhaul connectivity and services while simplifying operations of these increasingly complex 'mesh' networks." Tellabs will be demonstrating these smart backhaul solutions at Mobile World Congress.

The full report and model projections will be issued by Strategy Analytics in two parts in March. Please contact Sue Rudd srudd@strategyanalytics.com for details.

About Strategy Analytics Strategy Analytics, Inc. provides the competitive edge with subscription services, consulting and actionable market intelligence for emerging mobile and wireless technologies. With offices in North America, Europe and Asia, Strategy Analytics supports operators and their suppliers worldwide. www.StrategyAnalytics.com US Contact: Sue Rudd, +1 617 614 0709, srudd@strategyanalytics.comEuropean Contact: Phil Kendall, +44 (1908) 423620, PKendall@strategyanalytics.com SOURCE Strategy Analytics http://rt.prnewswire.com/rt.gif NewsItemId=NE65875&Transmission_Id=201302251620PR_NEWS_USPR_____NE65875&DateId=20130225

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