Microwave Backhaul Total Cost of Ownership (TCO) pt. 2

How Important is Initial CAPEX?

Are we seeing the forest or the trees?

Based on microwave Total Cost of Ownership (TCO) model posted earlier, the most significant contributor to total cost is ongoing OPEX.

We see an increasing trend of operators making decisions on backhaul solution based mostly (sometimes solely) on price (or initial CAPEX). While initial CAPEX is important, if the goal is lowest cost, this can be problematic approach as initial CAPEX it is not the most significant contributor to total cost.  Ongoing OPEX is key.

Perhaps a better approach would be to focus on features most impacting lowering total costs.  For instance, adaptive coding and modulation can lower antenna sizes – which can reasonably reduce 10 year TCO by as much as $48,000 (which is 2-3x more than initial CAPEX).  Deploying ring architectures with high layer (L2/L3 or packet-based) failure recovery techniques can enable lower per hop reliability and smaller antennas – further lowering costs.

Microwave Backhaul Total Cost of Ownership

Gary Croke

Product Marketing, Aviat Networks

Aviat Networks Speaking at the CTIA Tower Technology Summit

CTIA is always an interesting event especially the Tower Technology Summit. Today,  I sat on a CTIA panel session to discuss the topic of “Microwave Backhaul Gaining Momentum”, along with two other colleagues from other microwave companies. The purpose of the session was to  discuss the proposed changes to FCC Part 101 rules listed in 10-153 for fixed microwave links. Sounds pretty dry? Not really, as the proposed changes being considered by the FCC are intended to ease some of the restrictions placed on microwave links operating in the lower frequency bands, and also to enable more flexible use of technologies like Adaptive Modulation. In short, good ideas to make microwave even more cost effective for operators.

Each panelist gave a short talk on updates to the new proposed changes and what these changes mean for microwave backhaul.  At the high level, there was clear agreement that the current rules are pretty old, outdated, and need modification to support the industry’s migration to all IP. However, there was broad recognition that changes probably won’t happen overnight!

The panel had a heavy focus on total cost of ownership (TCO) for microwave solutions, and how smaller antenna sizes can play a significant factor in reducing costs.  I presented our view of a TCO model (that we recently presented in more detail on a recent Strategies for Lowering Your LTE/4G Backhaul Bill webinar with the WCAI ), and discussed technology and network design approaches to utilize smaller antennas. You can download a copy of the presentation slides here. Aviat Networks’ CTIA Tower Technology Summit Presentation

LTE backhaul capacity requirements and backhaul options for small cell architectures were also topics of discussion.  Our perspective on this is that LTE backhaul capacity requirements are often over-hyped and overstated, leading to poor backhaul decisions, which seemed to garner a lot of “head-nods” from attendees.  There was also general agreement from the panelists that new backhaul solutions were needed to address the small cell backhaul challenge and a “one-size-fits-all” product would surely not meet the needs.

We are just touching on the tip of what will become a hot topic of discussion in the months and year ahead. For more on this topic check back next week for my follow up post to Microwave Total Cost of Ownership (TCO) Pt. 1.

Gary Croke

Product Marketing, Aviat Networks

Microwave Total Cost of Ownership (TCO) Pt. 1

When choosing the right backhaul technology, total cost of a microwave system is a critical, often overlooked, consideration. TCO is not widely understood today. Lack of understanding of microwave TCO can lead to poor decisions about choice in backhaul technology and obscure the relative importance of features. Features that lower critical components of TCO are often not given enough attention.

A summary of a TCO model for a mobile operator in North America is shown below. Clearly, ongoing OPEX resulting from tower leases represent largest contributor to total cost.  These lease costs include tower space for antennas and cable runs, shelter/cabinet space and power, and ongoing move/add/change fees regularly paid to tower companies. The largest portion of this tower lease is related to the antenna size. Microwave products and features that enable smaller antennas sizes, less indoor space, and fewer cables are most important for operators.

10 Year Microwave Total Cost of Ownership

*Note: for private network applications (like state/local governments, public safety organizations, and utilities) who generally own towers, initial CAPEX is often higher, leading to an overall reduction in ongoing OPEX and TCO.

Make sure to check back next week for post #2 ” How Important is Initial CAPEX?” where I breakdown the true costs of initial and ongoing CAPEX.

Gary Croke

Product Marketing, Aviat Networks

Aviat Networks in the News: Recent Highlights and What is Ahead

From the Trenches at Mobile World Congress 2011

Whew! I am just now recovering from the week in Barcelona. Where else in the world can you go and find the next cool device, application and of course, Smartphones—or should I say superphones! There was a lot of great technology and amazing booths to explore. I could have spent all four days wandering the show floor, but there was work to do. Seems the Android booth and pins were quite popular. (More on that later ;-))

As Director of Corporate Communications, my role was to connect with the media. We had lots of briefings, which resulted in some good coverage for us. We announced two innovative new products just before the show and it was great to highlight the features for customers, press, analysts and other visitors to the booth. The Eclipse IDU GE3 is an ultra-compact indoor unit (IDU) that combines the very latest Carrier Ethernet networking and advanced radio features for hybrid TDM/Ethernet or all-Ethernet/IP wireless transmission. If you want to see it, check out the interactive 3D product model online. We also announced the WTM 3000, the first complete outdoor networked radio that will launch later this year.

Honestly, we’re pretty excited about it.

Everyone was great to work with, but I have to say a big “Thank You” to all the journalists and analysts who took the time to speak with us and cover our company. Chuck Kissner, our new CEO, also was interviewed by TelecomTV and discussed the future of wireless backhaul and Aviat Networks’ vision and product roadmap for the future. You can visit our news page for more details.

Needless to say, I spent a lot of time in meetings. I was just glad that we had a cool new booth for this show, thanks to our event team. You can view the photos on our last blog post Highlights from Mobile World Congress. Check it out and feel free to leave a comment about what you think.

What can I say, it was a great event. Can’t wait till next year!

So what’s ahead? We have some great events lined up for the next month that you can participate in or attend. It’s a good way to meet the Aviat Networks team and get to know our technology.

Upcoming webinar:

Building on the momentum of Mobile World Congress 2011 we will be hosting a webinar titled “Strategies for Lowering Your LTE/4G Backhaul Bill” on Thursday, March 17 at 4:00 pm Eastern Daylight Time. It is free, and you will get valuable information on how packet microwave radio systems are a cost-effective solution to meet the challenges of backhaul capacity. Stuart Little, our director of marketing—you may have seen his blog posts—and Gary Croke, senior product marketing manager will be speaking.

Upcoming tradeshows:

IWCE 2011

If you are in the Las Vegas area tomorrow, come by and chat with John Kerrigan, sales director, at the IWCE 2011, booth #8094 about the latest solutions from Aviat Networks in the government and public safety markets. To find out more, visit the IWCE website at http://iwceexpo.com/iwce2011/public/enter.aspx or check out the details on our Twitter site at aviatnetworks http://bit.ly/gVAXe2

CTIA Wireless 2011

Although we don’t have a booth at CTIA this year, we are meeting with customers and speaking on the topics of wireless backhaul capacity challenges, industry trends and microwave technology solutions. To find out more information about the show, visit http://www.ctiawireless.com. We will also be tweeting about our participation at the show within the next week.

2011 UTC Region 6 Annual Meeting

On March 28-30 we will be connecting with customers to discuss industry issues at the UTC regional meeting being held at the Crowne Plaza Hotel Lenexa in Overland Park, Kansas. As you might know, the Utilities Telecom Council is a great association dedicated to issues that face the telecommunications industry. For more information, visit http://www.utc.org/utc/2011-utc-region-6-annual-meeting.

Well that’s it for now. I will be back in touch next month to update you on the latest happenings at Aviat Networks. Till then, follow the dialogue and news on our social sites. Don’t be shy, jump in the conversation, we welcome it! Until next month…. Oh by the way, the Android pins are selling on eBay for those of you who are interested.

Android Pins

Cyndy Johnson,

Director of Corporate Communications, Aviat Networks

www.aviatnetworks.com

www.twitter.com/aviatnetworks

www.blog.aviatnetworks.com

www.youtube.com/aviatnetworks

Chuck Kissner Talks to Telecom TV

Martyn Warwick from Mobile World Congress 2011 in Barcelona, Spain, on the growth of wireless backhaul transmission traffic. As mobile operators ramp up 3G and begin to transition to 4G, Kissner says that microwave backhaul is well positioned to service data and voice communications traffic needs for the foreseeable future.

Highlights from Mobile World Congress 2011

Aviat Networks at Mobile World Congress 2011