Cisco in Mobile Backhaul, 1995-‐2009.
Henrik Glimstedt, Stockholm School of Economics
Dec 5th, 2012
INTRODUCTION
By the late 1990s, few companies attracted so much positive attention as Cisco did. It seen as the bearer of what was around the corner: horizontally and vertically specialists that, through focusing on a narrow set of core competencies and open standards and product platforms, retired old concepts and drive incumbents out of business. Much of this reputation was gained as IT-‐managers bought Cisco’s routers and switches in drives as they interconnected computers, offices, departments and sites. As we all became familiar with the concept of the Internet as well as mobile phones in the 1990s, Cisco’s familiar IP routers and switches (or rather bigger versions thereof) began to appear in infrastructure networks owned and run by telecom operators. Would Cisco, many asked, become a dominating force also in this market; if so: would Cisco drive out the operators key suppliers of telecom equipment vendors? Much pointed in that direction. Heavy Reading, an analyst outfit covering the comtech market space, concluded in 2003 that “Cisco System now dominates mindshare in the carrier market. Service providers believe that Cisco successfully transformed itself from an enterprise-‐focused vendor to the leading telecom supplier in the world.” (Heavy Reading 2003, p 10). The survey showed that operators ranked Cisco as #1 in terms of brand, product performance, price, quality and service & support. A few years earlier, this position was doubtless Lucent’s.
If the customers were in agreement on Cisco’s advantages, success should have been certain. Yet, Cisco never disrupted the telecom business the way it disrupted the enterprise and Internet gear business. On the contrary: It has been falling behind in its core markets. Cisco controlled 42 percent of the $5.9 billion edge router market last year, down from 57 percent in 2006, according to market watchers at Dell’Oro Group. Even in LAN and WAN technologies –Cisco’s home turf—the days of comfortable lead are numbered: Cisco has shed as much as six points of its commanding market share in Ethernet switches, as all of its competitors have registered gains.
For people -‐-‐like myself-‐-‐ with interest in the recent history of communication systems and strategies of high-‐tech companies it has always been puzzling as for why Cisco was unable, despite all the M&A and internal R&D-‐projects on carrier-‐class routers, dominate this market.
This memo attempts to, at least in part, give some good answers. It does so by analyzing Cisco’s attempt to enter one of the sub-‐markets that make up the carrier-‐class communication equipment market, namely mobile backhaul.
Definition of the backhaul market space
In a mobile network, the radio base station connects the user’s mobile phone to the network. It catches the radio signal. Backhaul is defined as transmitting that signal, that is, voice and data traffic from the radio base station cell site to a point of the mobile core network. This report hence defines backhaul as all Layer 1/2/3 transport, aggregation and switching nodes residing between radio base stations and the mobile core transmission network.
Fig 1: Access, Backhaul and Core Networks
Source: Cisco
Apart from just connecting and transporting the stream of signals between the radio base station and the radio base station controller (RBS in 2G networks) or Radio Network Controller (RNC in 3G), a process referred to as “traffic aggregation” is an essential part of backhaul. This task is critical to network operators for two reasons:
• Aggregation serves the purpose of combining signals sent from many different radio base stations served by a single RBC/RNC-‐node into a ‘thicker’ pipe, taking advantage of ATM’s inherent statistical multiplexing to reduce bandwidth
• Supporting different types of traffic from different mobile generations (2g, 3G…) over the same transport link, rather than serving different radio base stations technologies typical to 2G and 3G over different links.
Both types of aggregation serve to leverage existing network, especially where traffic is dense.
Market Drivers in Mobile Backhaul
While an exclusive show-‐off item, or at best, communication tool reserved for a social elites and executives in the 1980s, mobile phone penetration accelerated drastically in the 1990s. After reducing risks for operators – and parents – through pre-‐paid services, the mobile phones were suddenly not so exclusive any more. Deregulation and competition of the telecom markets drove down cost of calling. Economies of scale in mobile phones, as well as vendor subsidies to new subscribers, then drove down cost of buying a cell phone. As reforms led to growth and new patterns
of consumption in the emerging markets, the patters repeated itself also outside Western part of Europe, Northern America, Japan and Korea. The number of subscribers doubled from 0,5 to 1 Bn between 1998 and 2002. Only In 2005 another 300 million subscribers were added, taking the global past 2 bn subscribers (of which 70% was on GSM)
Fig 2: Subscribers by technology, actual and projected growth
Source: Dell’Oro
Demand for backhaul is driven by deployment of new cell sites as well as the upgrade of systems to handle the throughput required by mobile technologies, such as 3G. Mobile operators install new cell sites for a couple of reasons. The first is to expand geographic coverage to cover a higher number of mobile phone users.
The second reason is to sustain user quality of service and the average expected download speed of the mobile smartphone, as reflected in the relative importance of WCDMA above.
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Fig 3: Total number of cell sites, 1998-‐2012
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The number of sites also, as hinted above, began to increase as operators experimented with improving coverage through combining cells equipped with different types of RBS, filling in spots of bad coverage. Whilst the original base stations in the second generation systems had a standard coverage, equipment manufacturers started to introduce RBS technologies with varying coverage.
Fig 4: Radio Base station Coverage
Source: Yankee Group, 2005
Smaller RBS, i.e. so called micro or pico cells, allowed operators to find new solutions to the problem of covering demanding urban areas through more advanced cell planning. As we can see from the example, these combinations of macro and micro cells soon pushed the demand for backhaul as the sheer number of cells increased.
Combined, the driving forces turned mobile backhaul into major cost for the operators as well as an important market for equipment manufacturers. It is estimated that backhaul can account for as much as 30% of a mobile operator’s operating costs (Yankee Group, 2005)
Technologies and Standardization in Backhaul Networks
2G backhaul systems were built using the connections between radio base station and the core network run through either the same copper or fiber network that connects homes and offices to the core networks (phone and Internet), or by point to point microwave connections transmitting the signal from a “sender” radio on the cell site to a receiver radio close to the core network , i.e. a substitute for the fixed line connection.
Backhaul transmission from RBS to RBC/RNC to has traditionally been implemented through time division multiplexing (TDM) circuits over local T1 copper lines and SONET/PDH optical rings.
Fig 5: Physical carrier in voice networks
In its primary form, TDM (time division multiplexing) was developed used for controlling fixed line telecommunications systems. It is a well-‐established two-‐way communication technology that works well for real-‐time applications (e.g. voice). The advantage of TDM is in combining efficient use of bandwidth with low latency.1 If latency exceeds 150 milliseconds for ex-‐ample, the quality of the conversation begins to drag. At or above 200 milliseconds many listeners may find a conversation unintelligible. TDM networks are inherently synchronous. All network components must be synchronized with each other to ensure that data is not lost. In a native TDM network, clock synchronization is performed at the physical layer, and clocking information is carried along with data traffic. To make efficient use if wires, TDM has an inherent method of putting multiple data streams in a single signal by separating the signal into many segments, each having a very short duration. Each individual data stream is reassembled at the receiving end based on the timing. Thus several phone conversations can share a signal transferred over, say, a copper line. If many signals must be sent along a single long-‐distance line, careful engineering is required to ensure that the system will perform properly. An asset of TDM is its flexibility. The scheme allows for variation in the number of signals being sent along the line, and constantly adjusts the time intervals to make optimum use of the available bandwidth.
1 Latency is the time it takes for the data to reach its destination. As TDM allocates time periods, only one channel can transmit at a given time, and some data would often be delayed, though it’s often only in milliseconds.
SONET/SDH was originally designed to transport TDM voice services in larger volumes over fiber optic networks, thus taking advantage of the rapid development in fiber-‐optical networking. The forced breakup of AT&T in the United States created numerous regional telephone companies with surprising degree of difficulties in establishing interoperability across the different telecom networks. Fiber optic cabling already prevailed for long distance voice traffic transmissions, but the existing networks, involving T1 connections as well other types transmission, proved unnecessarily expensive to build and difficult to extend for so-‐called long haul data and/or video traffic.
Hence operators began to work on a common standard specifically designed for interconnecting for the public telephone network to handle bulk voice circuits with maximum uptime, minimal delay and guaranteed service continuity in mind. The technology has very strong support for latency control and hence network synchronization through very accurate clocking operations, which also could be coordinated with TDM clocking. The technology is time-‐tested, simple and deterministic. At any given time the operator knows what traffic is going over the links.
Architectural Control: 3G Standardization of Backhaul Technology
With the introduction of mobile broadband technologies mobile operators needed – many operators calculations showed -‐-‐ to increase cell site backhaul capacity from a typical 2 Mbps (2 E1/T1) at an edge site to ca 8 Mbps. If high-‐speed data services would take off in a big way, as they certainly did with the introduction of the iPhone and small modems connecting lap-‐tops to the internet via 3G networks -‐-‐ operators forecasted capacity need to grow to between 20 and 40 Mbps. At hubs or aggregation centers, where traffic from multiple sites is combined, backhaul capacity may need to be as high as 2 Gbps. These forecasts, and the soaring number of cell sites, made the TDM/SONET solution obsolete:
• Cost structure: Unlike infrastructure costs, backhaul expenses, especially leased lines, are on-‐going costs without adding much to service differentiation. Any cost savings realized in backhaul go straight to the bottom line.
• Complexity: Approximately 80% of existing backhaul networks comprise of legacy SONET microwave links and multiplexers stacking many 2G-‐ and 3G-‐related boxes in coexisting sites. This increases the CAPEX as well as operational difficulties.
• Scalability: A typical cell site requires two or three leased T1/E1 lines, representing 4 to 6 Mbps of bandwidth. New data intensive mobile services proved to be more than double this requirement. Adding this much capacity via TDM lines is time-‐consuming and economically prohibitive. Carriers need the ability to add capacity on demand to respond to changing customer needs.
• Efficiency: Because each T1/E1 line is dedicated, excess capacity cannot easily be shared. The current method of providing backhaul capacity invariably involves a substantial amount of unused—and expensive—bandwidth in the mobile backhaul.
Which technology should be used for backhaul transport? There were two dimensions to consider – physical carrier media and routing/switching. As for the physical layer, there were a choice between fixed lines and wireless backhaul connections. The rational for introducing SONET fiber-‐optical networking in backhaul was driven by improved scalability as much as it represented a strong
mechanism for network control. Compared to copper wire technology (TDM over T1). SONET was typified by a steep staircase cost function in the provisioning of RAN bandwidth as opposed to the roughly linear relationship between bandwidth and cost in copper lines. SONET could also be deployed on wireless connection systems.
Using point-‐to-‐point radio microwaves for SONET/PDH, that is, replacing fixed line networks in backhaul with a system of radio stations carrying SONET from the cell site to the edge of the core network, had a similar investment step-‐by-‐step curve.
By comparison, Ethernet technologies, which were mostly deployed in enterprise and LAN networks scale at very low cost. Amongst actors in the industry, it was widely held that Ethernet would be preferred physical carrier for the future.
Fig 6: Scalability by Cost and Bandwidth in Ethernet, Copper and Microwave
Source: Alcatel-‐Lucent 2008.
Operator’s calculations of CAPEX in relation to potential profits from services suggested that the TDM over leased copper T1 lines represented the most expensive option for future expansion to accommodate new demand for bandwidth beyond 2MBS typical to the GSM systems. The ideal scenario would be a self-‐build Ethernet, representing a saving no less than 60% compared to the leased copper lines alternative (Nokia Siemens Networks 2008). The question was however not self-‐contained. Rather, the choice of physical network technology closely tied to other technological choices, most notably to standards for switching and routing.
These issues question were closely monitored within the global and regional telecom standardization bodies involved o set new 3G standards for wireless broad band services between 1994 and 1999, that is to the 3GPPP and it related regional sub-‐organizations. To present the highly political and strategic process of agreeing on the architecture of the 2G and 3G systems (e.g. Glimstedt 2001) here would lead us beyond the scope of this report. Rather it suffice here to indicate that actors within the standardization body already in the 1990s were studying how to introduce support for mobile broad band communication whilst still maintain high quality of service, i.e. low latency voice services. From the perspective of telecom operators, there was a trade-‐off between two goals:
• support new multimedia services, building on packet switching transmission technologies because it offers superior scalability
• still have strong control to be able to differentiate between high-‐quality voice services
The widespread diffusion of fixed line Internet communications made TCP/IP a natural candidate for 3G networks. IP excelled in terms of scalability. Exactly how the traffic was routed was determined in a highly decentralized fashion, making control the weak point of IP. In routed IP networks, traffic moves between routers based on adaptive topology updates based on the exchange of "reachability" information among network routers. Traffic was routed "hop by hop" from router to router, following a path that could be determined only by examining the sum of the routing tables in the network at the time the traffic was moving. This made it impossible to engineer specific quality of service by allocating resources to traffic types.
While the key actors within the world of telecom standardization clearly identified support for multimedia services, and hence packet switching such as IP, as critical to future profits, they were equally preoccupied by the commitment to carrier grade switched voice services. After all, it was the switched high-‐quality voice call upon which the telecom operator business models was building. Customers were comfortable with paying for exactly this: access to a unique connection with good voice quality. Even if the telecom standardization process now was geared towards including support for future oriented multimedia services and packet switching, there was a strong tendency towards solutions that would protect the basic business model and profits associated with it.
Three key decisions defined the 3G standard, all of which reflected the bias towards protecting the basic telecom business model. First, the selection use WCDMA for the interface between the mobile phone and the radio base station, (the Uu interface) acknowledges the general need for more efficient use of spectrum and increased bandwidth. Secondly, ATM was selected for backhaul network (UTRAN) , including the Iu interface. WCDMA was perhaps the most critical decision. After several harmonization attempts of five original proposals, elaborated to a large extent within the EC funded Advanced Communications Technologies and Services (ACTS) program, an agreement by consensus was reached on the radio access techniques for UMTS, W-‐CDMA. Compared to the GSM
system, it had particular advantages in terms of scalability, efficient use of spectrum and bandwidth for mobile data communications.
Fig 7: Interfaces in the WCDMA standard
There were several reasons why the various parties in the standardization process arrived at ATM. The outcome of the technology selection process would have, as we will see below, far reaching implications for Cisco and other IP-‐based companies.
Because SONET was originally designed for voice and not variable-‐sized data packets, however, moving data across it was inefficient and required padding data packets with irrelevant data to make up any differences. Asynchronous transfer mode (ATM) was introduced as a solution for this inefficiency. Through the use of hardware network interface adapters, ATM networks break data into smaller cells for transport., ATM was based on rigorously defined levels of quality of services, allowing the operator to set different QoS for different types of transmission –voice gets higher priority and data lower—or indeed give an individual customer access to higher bandwidth at a different price. Secondly, the choice of ATM is partly dictated by the decision to use CDMA in the air interface. Because certain aspects of the CDMA radio traffic, e.g. as hand-‐over between different radio base stations when the end-‐user travels between different cells, require very strict time and latency control, the backhaul system needs to comply with these latency requirements. ATM involves a highly sophisticated mechanism for controlling latency and jitter called ‘statistical’ multiplexing, which met the strict requirements for time synchronization between radio and backhaul transmissions. Third, the parties also agreed that ATM has a high degree of backwards compatibility with respect to SONE. Due to SONET essential protocol neutrality and transport-‐oriented features, SONET was the obvious choice for transporting the fixed length ATM frames also known as cells.
Cisco’s backhaul strategy: criticism of the short-‐term solution
Cisco was no stranger to ATM. Already in the 1990s, Cisco first joined forces with AT&T in an alliance to develop capabilities in ATM switching. Much in the same fashion as Cisco had
acquired IP start-‐ups, the company also started to shop for cutting-‐edge ATM companies resulting in the acquisition of, among others, StrataCom, ArrowPoint and Lightstream. These acquisitions positioned Cisco as a credible supplier of ATM-‐based LAN/WAN solutions. In 1998 the Cahners In-‐Stat Group report ranked Cisco first in worldwide ATM LAN switch port shipments. 1998 fiscal year was the first billion dollar year for ATM-‐related sales, representing a 50+ percent growth of Cisco’s ATM business from 1997. Cisco's worldwide ATM WAN switch manufacturer sales market share is also ranked first at 27,2 percent for the first half of 1998. Cisco’s acquisitions of ATM-‐players did not provide the company with the same leverage in the core network markets. Cisco’s heavy-‐weight ATM switches were not really any serious match for the incumbents offering carrier-‐class core network ATM switches. Also Cisco’s sales in large scale switching also trailed some entrants, such as Cascade.
To make up for its weaknesses in core network ATM, Cisco had another play card up its sleeve -‐-‐-‐ MPLS, announced already 1996 by Cisco.2 Both ATM and MPLS technologies were designed to accommodate TDM voice and with various types of data communication technologies into a convergent network. The primary difference between ATM and MPLS is that while ATM was designed to exist in a circuit-‐switched environment, MPLS has its place within modern packet-‐switched networks, such as Ethernet or IP.
The deployment of ATM accelerated through the diffusion of the Internet and IP. In practice, the ATM switches were deployed at the core network to integrate IP-‐based LAN and WAN networks. However, interface differences made it however difficult to deploy IP services over ATM networks. In particular, ATM required the segmentation of packet data in ways that did not fit with the principles of IP packet data. ATM uses fixed-‐length packets, which implies that IP packets cannot naturally fit into ATM-‐packets. This inherent difference made it necessary to translate IP into ATM, a costly and slow process that required extra investments.
Cisco’s solution to this problem was MPLS, which provides the operators with a high degree of network control but with a more natural fit with IP services. MPLS defines a method by which the entre IP-‐packet can be transported in a single MPLS-‐frame, which solved the in-‐efficiency problem. As a result, MPLS could theoretically replace ATM as the preferred choice for transporting IP packet in mobile backhaul (and core) networks.
Armed with MPLS, no company within the backhaul business pressed for the radical all-‐IP scenario harder than Cisco. Once the notion of wireless internet services diffused across the landscape of equipment vendors, mobile operators and policy makers influencing spectrum allocation, Cisco suggested that mobile service providers could use Cisco network equipment to migrate TDM into
2 The ideas had been brewing in the company since the early 1990s. An early patent (USPTO Pat # 6,147,999 describes in the abstract “…a pipelined multiple issue architecture for a link layer or protocol layer packet switch, which processes packets independently and asynchronously, but reorders them into their original order, thus preserving the original incoming packet order.” In parallel with the internal R&D program, invited partners within IETF to participate in the setting of open standards for Tag Switching. Whereas Cisco concentrated on the standards for the basic MPLS switching functions, other participant in the standardization group (e.g. Asend, IBM, Toshiba, and Ipsilon) contributed with standards complementary functions (e.g. wireless functions supporting the application of tag switching in wireless systems.)
integrated IP packet-‐based networks capable of supporting multimedia services under way. Many so called white papers and presentations highlighted the technologies available in Cisco’s hardware and software portfolio, e.g. 7000 Series carrier-‐class routers and 12000 Series carrier-‐class routers could be the work horses in an integrated mobile network environment building on IP/MPLS in layer 2.5 in order to ensure that traffic requirements (e.g. latency and differentiated quality of services) would be met without complex set up involving TDM and ATM.
Fig 8: Cisco IP/MPLS Network Convergence for Mobile Operators
Source: Cisco System 2004:4
Backhaul (i.e. RNC to Cisco 12000 Router in Traffic Edge) was not yet specified very clearly (see above). The convergent IP/MPLS-‐approach to backhaul followed the same basic principle: traffic from radio base station sites to the core mobile network via aggregation and distribution nodes was to be implemented on IP/MPLS.
“Mobile operators have been deploying mobile services for voice, data, and multimedia in disparate parts of their legacy networks. Many are now actively engaged in researching or deploying both existing and new mobile services based on an IP/MPLS backbone. As the leading global IP expert, and with broad networking experience and products, Cisco is working with mobile operators to assist them in taking advantage of the many compelling benefits from a migration to a converged wireless network backbone based on IP/MPLS...” (Cisco 2004, p)
Fig 9: All-‐IP Backhaul
Cisco’s All-‐ IP
←……. I P / M P L S …. →
Cisco 2008, p xx.
No doubt, the IP/MPLS scenario was closely tied to Cisco’s main router business in LAN/WAN networking solutions – dark leased line fiber was the preferred physical carrier media for IP/MPLS. As the demand for interconnection between both different office branches within metropolitan areas as well as residential homes to the Internet in densely populated urban areas grew throughout the 1990s, the need for metropolitan aggregation networking exploded. Simply put: each home could not have a unique last mile connection to the nearest telecom branch office, which could be solved by implementing local network ‘rings’, integrating all offices and residential homes in a local area. Over time, metropolitan networks sprawled urban areas. This was Cisco’s home turf, that is, the market that Cisco so successfully began to exploit in the 1990s.
As bandwidth demand kept soaring, fiber optical networks were deployed due to its superior scaling. Cisco had all the incentives in the world to drive the demand for metropolitan fiber optical networking. If mobile backhaul increasingly could be shifted from TDM copper wires to leased MPLS/fiber lines, Cisco would be well positioned to respond.
Limiting operator preferences
Throughout the growth of 2G mobile systems such as GSM and CDMA, carriers made substantial investments in 2G backhaul technology, making Cisco’s so a rip-‐and-‐replace strategy less feasible. Mobile operators were certainly inclined to leverage existing infrastructure investments as long as possible. What is more: major operators focusing on the emerging markets were still investing heavily in the expansion of their 2G mobile network. It should be noted that 2G dominated in mobile operators investments until 2008, although operators began to roll-‐out 3G network in 2002. The gradual migration from 2G to 3G will definitely lead to long term co-‐existence of the two networks, which in turn poses a challenge in backhaul to support the multi-‐service transport requirement for a longer duration. This leads to a requirement to bear native TDM services, plus TDM + Ethernet services and IP in the near-‐future, that was, for the next five to ten years. Hence, operators said no to the disruptive scenario. Rather they preferred a hybrid solution, at least as an intermediary solution.
On need only to take a quick glance at deployment scenarios by mobile operators to realize the gap between the All-‐IP/MPLS vision and the realities of hybrid solutions. Voice and other critical services were still transported over TDM/SONET in the existing copper line network. Different technologies and lines were then used to ‘off-‐load’ mobile broadband services to decrease the backhaul traffic over the traditional lines. What is more, there was not a convergence as for how new the technologies were blended into the existing networks. Rather, the mix depended on the individual details of operators legacy networks.3
Fig 10: Deployed standards by layer4 in mobile backhaul
Legacy 2G (GSM and GPRS)
3G (UMTS) 4G
Service Voice Data Voice Data, Video
Voice, data and video
Layer 3 ↑ IP ↑ IP IP Layer 2.5 ↑ IP over Abis ↑ ↑ ↑ Layer 2 TDM TDM ATM ↑ Layer 1 SONET SONET Ethernet Physical layer Copper, fiber or microwave Based on RAD, 2004.
Legacy 2G, a TDM backhaul architecture was applied to provide services as, shown Fig. xx above. These TDM backhauls have been widely adopted to accommodate both TDM and ATM. In Phase 3G
3 We need also to recall that the real break-‐through of mobile broadband services was associated with Apple’s pioneering iPhone (2007) and HSDPA-‐dongles, allowing lap-‐tops to connect to the internet through 3G+ networks. By 2003, these developments were certainly just, at best, dream scenarios. Before the new killer applications, uncertainty about the demand for mobile broadband services among mobile operators certainly limited their willingness to move directly to All-‐IP/MPLS backhaul. (Investments in 3G radio base stations was however a sound idea already when they were introduced in 2001, because WCDMA spectrum technologies carried more phone connections per RBS than previous generation. Regardless of the degree to which users eventually would use mobile phones for mobile internet applications, investing in 3G RBS made good sense to mobile operators. 4 See Appendix 1 for a description of the layers.
the backhauls are shifted to TDM/packet hybrid backhauls, building on hybrid networks that uses both TDM and ATM in parallel for supporting voice and data. As the broadband services require larger bandwidth than those of the existing 2G/3G services, more effective packet backhauls will be deployed and partitioned from the existing TDM backhauls. In this phase, the TDM-‐based 2G/ATM-‐based 3G service backhaul platform is gradually shifted to the new packet one. As a result, the TDM backhauls will be scaled down.
Cisco in hybrid networking
Most backhaul networks are not “greenfield” , but rather backhaul networks that are evolving. This evolution requires a smooth and risk-‐free migration plan from legacy networks to next-‐generation, packet-‐based communications. For wireless operators, this is paramount. Replacing legacy TDM networks with IP-‐based networks must be carefully planned as it involves a gradual process, with a hybrid network having to provide simultaneous support of TDM and IP/Ethernet communications. As the market regained its vitality again in 2004 after the dramatic slump connected to the Internet Crises, Cisco began addressing the complexity and need for system integration. At that point, Cisco worked closely with Motorola in aligning its IP solutions to the hybrid scenario favored by operators. (Heavy Reading MB) The key to Cisco’s value proposition was ‘port density’, which aggregates a large number of copper lines on a platform providing Abis optimization, i.e. a method to run IP-‐traffic over TDM copper lines. Cisco did not arrive at this solution alone, but relied heavily in the development of Abis optimization on a strategic partner, Motorola. As for the hardware,
Cisco marketed this solution as Radio Access Network Optimization. Like many other vendors in backhaul business, Cisco saw limited sales of Abis Opimization. Partly, weak sales resulted from disappointing hardware. Cisco deployed its MWR 1941 product, which never gained much popularity. Hence Cisco answered to criticism through introducing a beefed-‐up version of this edge router. However, this move lacked support from Cisco’s general business model.
Along the similar lines, Cisco worked on concepts for offering MPLS in ATM environments. "IP+ATM" was Cisco's trade name for equipment that simultaneously supports traditional ATM services and optimized IP transport using MPLS. These networks offer traditional ATM services while providing optimized IP support. Cisco’s solution was to implement MPLS in existing or new ATM switches (MPLS-‐over-‐ATM) . Operators could implement MPLS routing on ATM switches by either integrating the routing engine inside the switch or by using separate routing controllers (a router).5
5 The integrated solution runs routing and MPLS software on the switch control processor. This is done on the Cisco LS1010, Catalyst 5500, and 8540 MSR ATM switches. The controller model makes use of a separate router that controls the switch hardware. This separate router is called a label switch controller (LSC). The LSC can be either a routing card in the switch shelf or an external router. The LSC will handle all the IP functionality and would interact with the switch via either the backplane (for a router card) or an external control interface. The first label switch controller offered by Cisco is an external controller for the BPX 8650 platform. The MGX 8800 will use an LSC running on the Route Processor Module (RPM) in the switch shelf.
Fig 11: Cisco’s positions in the wireless backhaul market
Legacy 2G (GSM and GPRS)
3G (UMTS) Hybrid All-‐IP
Service Voice Data Voice Data, Video
Data, Video Voice, data and video
Layer 3 ↑ IP ↑ IP IP, ATM IP Layer 2.5 ↑ IP over Abis ↑ ↑ MPLS IP/MPLS Layer 2 TDM TDM ATM ↑ ↑ Layer 1 SONET SONET SONET or
Ethernet Ethernet
Physical layer Copper, fiber or microwave Comment: Cisco’s strategic thrusts in bold italics.
The approach to transport MPLS over ATM switching evolved into the concept of pseudowires, a industry concept for creating ‘piping’ MPLS through ATM switching, or the pipe ATM through MPLS-‐switches.
Fig 12: Pseudowire technology
The pseudowire solution can be described as software within a ATM switch that creates a tunnel through which IP/MPLS traffic flows, or visa versa, a tunnel in a MPLS switch through which ATM traffic flows. At any rate, pseduwires were widely adopted by Cisco, as well as several other IP-‐based new entrants such as RAD, Ciena and Telabs, as a way to sell highly scalable MPLS equipment into wireless backhaul. (Heavy Reading 2006:39-‐40)
However, our interviews with mobile operators, network design consultants as well as with Cisco executives points to the fact that Cisco remained for long a “box-‐seller”, implying that the company did not see it as its main task to be responsible for integrating the hardware-‐software solutions into the customer’s sites. (Among our many interviews, we here particularly refer to Bengt Nordström, Northtstream Consulting; Sören Ellingsen, Cisco Systems, Fredrik Lindström and Åsa Tamson, McKinsey & Co).
The degree of complexity in a network is considerable. “Just tuning the radio network is a difficult thing to do. One vendor has a RNC with something like 10.000 parameters that can be changed. It is one of the most complex pieces of equipment ever produced…”Implementing new technologies into the system often have far reaching consequences. (HR, Vol 2, No2, 2004 p 55)
By contrast to Cisco, incumbent mobile system vendors have traditionally seen it as a necessary service to stand behind and guide the implementation of their offerings into the customer’s network. Such customer support has long been the hallmark of telecom equipment vendors, requiring deep system integration capabilities. Vendors need to apply these insights in system integration in general, but also apply a “catalog consisting of 100s of used-‐cases which the vendors have built up over the years”, as one of our informants put it.
Cisco never possessed this kind of specific system integration capabilities pertaining directly to2G and 3G networks, nor did it aim at building it. Rather, Cisco’s executives identified the drawback of building and applying system integration capabilities as part of the sales process – a huge force of highly skilled engineers working (almost) for free.
The lack of system integration made Cisco look for alternative ways to go to the market without scarifying its position as box-‐seller. It is hence worth noting that Cisco increasingly sold boxes to operators through incumbents vendors. “It is clear that…”, as one commentator put it, “…to penetrate wireless providers, partnerships are key [for Cisco].” (Light Reading xx-‐xx-‐xxx) Particularly targeting wireless operators, Cisco’s added a reseller agreement Lucent to its previous agreements with Motorola and Nokia to increase sales of its line of carrier class routers. This model allowed Cisco to benefit from the re-‐seller’s system integration capabilities and catalog of used-‐cases, while the re-‐seller benefited from having access to a wide range of boxes (to the extent they, such in the case of NSN, often acted as resellers for Juniper and Tellabs as well as Cisco).6 Or as Steven Levy, an analyst with Lehman Brothers, put it: “It’s a win-‐win for both companies. For Lucent it offers them a best-‐in-‐class IP systems portfolio and will probably expand their ability to win contracts. And for Cisco it gives them a sales channel into incumbent carriers.”
In 3G services, the dominant actors in the standardization process agreed on building on ATM switching. In backhaul, carrier focus after 2003 was on ATM-‐based aggregation. In this respect, Cisco’s core strength in IP and MPLS was not well-‐aligned with ATM-‐based aggregation. Hence, Cisco met difficulties as the company, again through its partnership with Motorola, tried to market IP-‐based routers, such as MWR and MGX cards rather than actual ATM switches.
6 At that time the company announced that it would be concentrating on markets like mobile wireless through partnerships with key players. Lucent hence discontinued development of IP aggregation switch, the SpringTide Service Switch, and its ATM multiservice switch, the TMX 880. These technologies were seen as too weak to be differential in mobile carrier segment.
Table 13: Routers and Switches in Cisco’s backhaul Portfolio 2000-‐2005
Comment 1995 7500 Series
Router Edge routing The world’s most widely deployed edge
router, mainly used in fixed line metropolitan and large enterprise networks
1996 12000 Series Router
Carrier-‐class routing
MWR 2941 Cell-‐site (edge) router For optimizing, aggregating, and transporting traffic over T1/E1, Carrier Ethernet, MPLS, and IP networks
ME 3400 Switch Aggregation ONS 15454
SONET/Ethernet Optical switching Up-‐grade in leased line fiber optical
networks. Increases capacity (10gb) and combines the functions of multiple metro systems, including SONET/SDH multiplexers and digital cross-‐connect network elements
CSRS-‐1 Carrier class routing Catalyst 4500 Ethernet aggregation Catalyst 6500 Ethernet aggregation
When first focusing on wireless backhaul, Cisco built on mainly two of its portfolio-‐routers for both transport and aggregation (i.e. the 7500 and the 12000). Being developed as parts of Cisco’s successful product developing program in the 1990s, these two routers became widely deployed in fixed line access and edge networks. Armed with re-‐selling arrangements, Cisco saw a new rationale to beef up its backhaul portfolio. Now, Cisco accelerated its adaptation of fixed line products to backhaul applications.
In a first big push, Cisco adapted products to IP/MPLS applications in the backhaul. Secondly, the company initiated its long-‐terms development program for Ethernet-‐based switches and routers. Products like the MWR 2941 and Catalyst series were, essentially, scaled up from low-‐capacity LAN products.
These products gained too little traction in the backhaul market. As we will see below, Cisco did not have a real hardware-‐based differentiation until finally made another acquisition -‐-‐ Starent Networks – which provided Cisco with what observers called a ‘real gem’ of a box. In addition, the re-‐selling tactics employed by Cisco was unstable, if not outright self-‐limiting. Firstly, Cisco lost its partner agreement with Lucent when in connection with the merger with Alcatel for the simple reason that the French company brought world-‐class router technology into the new combination. Secondly, few incumbents liked the idea of exclusive re-‐selling arrangements. In the case of Nokia, and later NSN, the incumbent engineered re-‐selling arrangements with, in addition to Cisco, Juniper and Tellabs. Re-‐selling on those terms made for a very competitive environment. Other re-‐selling arrangements, as in the case of Ericsson and Juniper, were also terminated as incumbent telecom vendors followed Cisco’s lead in filling their IP-‐product line gaps through buying one or two of Cisco’s competitors.
Either way, box-‐sellers suffered.
Cisco’s strategies were closely tied to fiber, rather than microwave transmission. This particular aspect also played an important limiting role, because mobile operators increasingly attracted to the idea of shifting traffic from fixed leased lines to wireless transmissions, so called point-‐to-‐point microwave links. This preference would become important to mobile equipment vendors, which were well positioned to leverage their investment in cutting-‐edge radio technologies also in backhaul solutions.
A (very brief) contrasting case: Ericsson’s backhaul strategy
Ericsson had, by 2007, 20 per cent market share in the global backhaul market. The company built its main strength in the backhaul market space by and large around its leadership in point-‐to-‐point microwave transmission technology. It had more than 300 customers and shipped more than one million units between 1995 and 2005, representing 40% market share in backhaul point-‐to-‐point microwave connectivity.
Ericsson also gained strength also through being the first company to demonstrate how Abis optimization could be used for packet switching signaling (as in GPRS and EDGE services). But in sharp contrast to Cisco, Ericsson’s general business model supported complex system integration tasks, as part of the sales and roll-‐out process. System integration capabilities also mattered to the company’s success in microwave as those backhaul networks grew in size, capacity and complexity. In 3G, Ericsson tried a closed system approach through building in an actual ATM aggregation mechanism (derived from the company’s own ATM platform) into the WCDMA radio base stations and the RNC. This suffered from lacking scalability which damaged Ericsson’s position in the backhaul market, and forced the company to fill the gap in its product portfolio through alliances, acquisitions and re-‐branded products. Despite its weakness in IP, the company has hence experienced success with that it’s hurried IP-‐program, even if performance was spotty.
Just as Cisco’s foray into mobile backhaul grew out of the company’s fixed LAN/WAN router business, Ericsson’s backhaul policies were equally closely tied to the leading position in radio technologies. Quite naturally, Ericsson could use its advanced position in radio technology to develop point to point radio links, substituting fixed line backhaul networking.
Positive for use Negative for use Fiber • Wired infrastructure was easily
accessible due to its sprawl in urban areas.
• Equipment can scale to higher bandwidth at low cost , especially with MPLS and Ethernet
• Expensive to lay network and right of way (property rights)
• Often owned by independent owners with demands for margins
Microwave • Insufficient wired infrastructure due to rugged terrain or otherwise challenging conditions
• Scales were well over long-‐distance transmission without tricky property rights
• May required licensed frequency spectrum which places limits on spectrum availability.
• Often requiring manual alignment of antennas to maintain high throughput
Source: Donegan, 2005.
Microwave became a stunning success already in the 2G era for good reasons. Under certain conditions, fixed lines were disadvantaged compared to wireless transmission systems. Many of the large 2G operators, such as Vodafone, Sprint and Orange, decided early to go largely microwave in the mid-‐1990s to avoid the dependence of leased lines. For service providers in rural areas and rugged conditions typical to rugged markets, microwave made good sense too. Ericsson identified this opportunity, resulting in the portfolio of Mini-‐Link microwave backhaul products.
When faced with the soaring demand for bandwidth in the backhaul of the mobile infrastructure a consequence of the plans to migrate to mobile broadband services, those operators largely on fixed line transmission in the backhaul began to consider investing in the microwave backhaul transport solutions. In a survey of backhaul transmission technologies, mobile operators largely dependent on leased lines expressed that they were in the process of aggressive shifting to microwave in the backhaul. Those operators that already in the 2G era had made significant investments in microwave transmission responded that they would continue to invest in microwave in the backhaul as they added more bandwidth. (Heavy Reading 2003).
Soon the demand microwave for microwave products became the growth-‐engine in the transmission part of the backhaul market. Transmission equipment overshadowed aggregation routers in terms of revenues within global the mobile backhaul equipment market. Whilst transmission equipment grew into a $6bn affair by 2007, aggregation electronics represented only $2bn.
As Ericsson considered how to respond to the new demands for additional bandwidth in wireless backhaul, they made a clear priority of earning margins from microwave equipment rather than from its sales of aggregation equipment. That choice was not too hard.
Firstly, Ericsson’s ATM-‐based aggregation products, such AXD 301, did not gain traction with mobile operators. Nor did mobile operators respond favorably to the idea of building in aggregation mechanism into radio base stations and radio network controllers. Particularly since the solutions did not scale easily, operators turned to alternative solutions, particularly Nortel ‘s and Alcatel’s open product architectures. As Ericsson began to plan for discontinuation of the ATM-‐program, the
company turned to particularly three different IP and optical networking experts – Axerra, Juniper and Marconi, to fill the gaps.7
Secondly, though both transmission and aggregation grew significantly profit opportunities were differently distributed. In microwave, Ericsson comfortably shared the bulk of the profit pool with just one major player, Alcatel. By sharp contrast, aggregation equipment was a by far more contested terrain where practically all incumbents competed with their product lines amongst themselves and against a slew of entrants -‐-‐including Cisco, Ciena, Juniper, 3Com, Tellabs-‐-‐ of which some would be acquired by incumbents.
However, bundling together transmission and aggregation equipment into package deals made a great deal of good sense to Ericsson, because offering aggregation equipment to razor-‐thin margins meant two things – discounts on routers was not a big issue as long as it also helped Ericsson getting got the profitable orders for microwave equipment, the pricing policy made it difficult for IP-‐specialists to establish a strong presence.
In other words: Ericsson’s owe its strength in mobile network equipment more generally because the relatively slow commoditization of the RSB compared to other nodes. It seems very likely that the microwave units (which are precisely small radio base stations) have played a similar role in the backhaul-‐segment of wireless infrastructure. Hence Ericsson could push forward in backhaul, using two pillars: system integration and radio technology.
Conclusive discussion
This far, we considered Cisco’s strategy and performance in backhaul, focusing of causes of limited success. Let me point out already here that I do not see this as being a matter of how good Cisco’s boxes were. Rather I would like to emphasize a set of mismatching relationships that look like good candidates.
• Firstly, Cisco’s centered its entry into this particular market on its radical All-‐IP vision, suggesting that operators should rip-‐and-‐replace existing infrastructure in one big push. This made a poor fit with operator’s views on leveraging existing investments by inserting an intermediary transformative phase, which we described as hybrid networks that gradually blended in elements of mobile broad band technologies in the 2G voice centric networks.
• Secondly, Cisco saw itself as a datacom company. Hence, Cisco chose to work with datacom companies as it worked on open standards. This strategy made for a bad fit with customer expectations, since industry standards shaping the telecom environment was set in different standards organizations, e.g ETSI and IEEE. Hence were operators expecting ATM-‐based products, which did not match with Cisco’s orientation towards IP, Ethernet and other related technologies standardized in cooperation with other datacom companies through IETF, Internet Engineering Task Force.
7 ATM vendors have scrapped plans to further support ATM switch development. Cisco stopped development on its IGX 8400 and BPX 8600 ATM platforms, and Ericsson has ceased developments for the Ericsson AXD series. In addition, support for Nortel’s Passport ATM-‐switch has ceased as no prospective buyer could see a rationale for buying rights to Nortel’s ATM technology as the company was broken up and sold part-‐by-‐part after going bankrupt in 2007.
• Third, Cisco’s general business model as a box-‐seller did only lend half-‐hearted support to the companies attempt to meet customer requirements concerning system integration as being integrated into the sales process. Hybridization of broad band technologies in complex systems, as Cisco tried to do with its Abis optimization product, required not only deep understanding of the customer’s system and all its unique solutions but also a big catalog of reference cases.
All these misfits impacted Cisco’s performance in backhaul negatively. More than anything else, however, it was Cisco’s one-‐sided specialization in fixed line LAN that limited its potential to grow in the mobile backhaul space. This is obvious from our discussion about how radio-‐centric vendors with their portfolios of microwave transmission products, such as Ericsson, dominated the segment. The investigation of the backhaul market has a bearing -‐-‐it seems to me-‐-‐ on a bigger issue that may shaped the relations between incumbent mobile system vendors and new entrants.
Not only did the successful radio base stations supplier dominate in radio access and in backhaul, but they also dominated in in mobile core. The bigger picture has been that the market broke down in four tiers:
• Ericsson has continuously been in the forefront, despite its difficulties between 2001 and 2003 to launch IP-‐based products. From 2007 and onward, Ericsson plays the dominating role in mobile core.
• Alcatel, Lucent, Nokia and Siemens battled for second and third positions. • Router vendors such as Cisco, Juniper, Tellabs, Starent and Ciena were players in some sub-‐
segments of the market where the nodes were building mostly on IP routing technologies and less on TDM, i.e. GGSN and ‘policy’ servers. Just as in backhaul, Cisco and Juniper has been dependent on re-‐seller arrangements and strategic alliances for finding channels into the operators.
• Huawei -‐-‐the Chinese full-‐service vendor-‐-‐ is the only new entrant that gained real traction in mobile independently of incumbents.
Despite their leadership in IP fixed line technologies, Cisco, Tellabs and Juniper have had very little ‘account control’ and struggled hard to remain in this market. Between them, their combined market share never went beyond one quarter of the GGSN router sales, which in itself represented a very small part of mobile core. They played no role at all in products building on combinations of TDM and IP, such as SGSN nodes. While lacking experience of voice centric TDM technology may explain this pattern partly, should not oversee the overriding importance of the relationship between sales of radio base station and sales of mobile core products.
Both Cisco and Tellabs have later commented on the critical importance of radio technology in mobile infrastructure markets. Tellabs has publically, in a press release, cited incumbent’s policy to accept low margins in routers and switches to leverage the all-‐important radio base station business as a key reason why the company considered withdrawing from mobile core despite major investments throughout the 1990s. (Tellabs 2012) Cisco describes in a white paper on the Evolution of Mobile Network (Cisco 2010) how incumbents worked through the “network-‐centric model” where the radio base stations are of primary importance and the most differentiating element of the network. Other nodes, be they ATM or MPLS, are more or less sub-‐ordinated elements in the sense that they are reduced to a non-‐differentiating “necessity to facilitate transport of subscriber data.”
(p3) In this model, incumbents with particular strength in mobile broadband radio technology, that is, WCDMA radio base stations, will dominate the industry and command prices. By contrast, Cisco sketches a different scenario -‐-‐the service-‐centric model – where the radio base stations are standardized on the principle of Ethernet, meaning that they are important but not exclusively differentiating nodes. On this view “…the radio base station connects subscribers to the wireless network much the same way that an Ethernet-‐port connects a device to a fixed network…” (p 3) The reduced role of the radio base stations should be been in the light of the increased importance of IP/Ethernet needs to be seen in the light of the augmented role of the other IP/Ethernet-‐based elements of the wireless network: “The IP network…”, Cisco writes, “…is considerable more important [under the service centric-‐model], helping with optimal service delivery…” The operative concept here is service delivery, implying that the mobile operator’s ability to offer differentiating services to its subscribers will not be linked to the radio base stations but the IP-‐nodes.
On the one hand, Cisco naturally advocates IP as a general platform for service oriented mobile communication systems. As of 2012, that idea is not particularly radical. It is noteworthy that the key actors in the telecom business chose IP as the basis for 4G mobile systems, much the same way that they pegged 3G WCDMA standard on ATM. Still, most backhaul networks are not “greenfield” cases, but rather backhaul networks that are evolving. This evolution requires a smooth and risk-‐free migration plan from legacy networks to next-‐generation, packet-‐based communications. This is paramount for network operators. Replacing legacy TDM networks with IP-‐based networks must be carefully planned as it involves a gradual process, with a hybrid network having to provide simultaneous support of TDM and IP/Ethernet communications.
Even being an advocate for a radical transformation of connection-‐oriented networks to service oriented networks, as we just concluded from the above, Cisco seems to have learned the lesson. Rather than remaining a box-‐selling outsider without much strength in neither system integration, nor in radio, it has been since at least 2009 focusing on presenting themselves as a solutions provider. Central to this approach was the $2.9bn acquisition of Starent Networks, Cisco’s most significant M&A-‐activity since the much-‐debated and ultimately failed unsuccessful acquisition of Linksys (and other consumer-‐oriented companies) since 2003. One the one hand, Cisco’s routers were not always seen as an obvious choice. "Our channel checks…” one analyst have observed, “…have indicated Cisco's 7600 didn't have the features required for all… [future] networks.” Many operators have selected Starent’s key product ST-‐40, now re-‐branded as ASR 5000 by Cisco. Starent’s hardware is not just an excellent choice for mobile operators, but the company has also – more importantly – been recognized as a gained reputation for providing stable solutions in terms of core mobile networks.
The Starent-‐developed packet-‐handling systems are geared towards and has gaind traction with operators for use with the backhaul networks that carriers are creating to handle the explosion in mobile data from smartphones “Starent has given them technology and products that could be very competitive and may put them ahead of [Alcatel-‐Lucent] and Juniper, which are still developing their own products,” says Dell’Oro analyst Shin Umeda. “Over the next two to five years, this could represent a big opportunity in core packet networks.”
On the radio side, Cisco has downplayed Wimax. Previous to acquiring Starent, Cisco acquired WiMAX vendor Navini Networks in 2007 to become a key supplier to of WiMax RBS, particularly to
Clearwire for its mobile WiMAX buildout. But a leading mobile operators AT&T and Verizon -‐-‐ both Cisco customers – announced plans to adopt LTE instead of mobile WiMAX as their 4G service delivery platforms. But now that Starent fills out its mobile packet core portfolio, the only thing Cisco's missing is radio access network (RAN). Cisco has recently announced that rely on third parties, such as NEC and SIAE-‐Microelettronica, to provide what Cisco calls a unified solution.
APPENDIX 1:
To sort out the differences between how different technologies works, technologists commonly makes references to the ‘protocol stack’, visualized as a stack of seven interconnecting layers of communication. Each layer accomplishes its own task and then hands the information on to the next layer, using a variety of protocols (communication standards) to interface with the user, for operating system functions, information conversion and the delivery of this information to the destination device.
The layered model is separated into two distinct levels. The upper ‘application’ level includes the application, presentation and session layers while the lower ‘dataflow’ levels include the transport, network, data link and physical layers. This paper is only concerned with dataflow.
1 The Application Layer. Applications allow the end-‐user to browse the web, email friends or
colleagues, and initiate various network related tasks and operations. One of the best known protocols used in the application layer is the Hyper Text Transfer Protocol (HTTP), the standard used to send Web requests and pages between browsers and servers.
2 Presentation layer includes character set conversion (between languages), data compression and encryption. Common examples are HTML and JPEG.
3 The Session Layer initiates and ends communication between your computer and the network.
4 Transport layer provides reliable end to-‐ end communications by providing service addressing, flow control, multiple connections, datagram segmentation, and raw data error checking. The Transport layer breaks data into segments so it can be sent over the network and reassembles the segments at the other end. end, and ensures that the data is received at the appropriate device. An example Transport protocol is Transport Control Protocol (TCP), used on the Internet.
3 The Network layer has many functions. One of the most important of these functions includes the assignment of logical IP addressing (the names of the network computers) to network devices. Other functions include providing for network routing, flow control of the connections, and sequencing of the constructed packets. A common Network Protocol is Internet Protocol (IP) used on the Internet.
2 The Data Link layer provides the physical addressing –known as MAC addresses– to the device on the network and manages flow control. The Data Link layer organizes data bits into a rudimentary structure known as a frame. The frame contains information about the physical source and destination address and fields that are responsible for synchronization, flow control, and error checking. An example protocol is PPP, used by home computer modems to call their ISPs.
1 The Physical layer, defines the physical path through which the information flows. It includes the transmission media (the wires) and the actual data signals (the current). A common example of the Physical layer is the Ethernet cables we use to connect computers to the network at the office.
0 Raw physical media: copper, fiber cable, radio wave.
APPENDIX 2: Note on Cisco’s WiMax Play
Cisco entered the WiMAX RAN market in 2007 through the acquisition of Navini Networks for $330 million in 2007. It was however a poor heading bet, should Cisco’s way of linking backhaul to fixed line technologies backfire. Operators were (and have remained) skeptical against using WiMax as carrier technology in the backhaul for several reasons. Vendor research by Heavy Reading suggests a negative outlook for WiMax in backhaul. In particular, Wimax was conceived and sponsored by Intel, its primus motor, and other datacom companies to provide a low-‐cost alternative to the mobile standards sponsored by the telecom-‐centric standardization organizations championed by Ericsson and other incumbents. Regardless of its potential advantages as a access technology, it has some very specific disadvantages as a backhaul technology. One of those disadvantages related to how WiMax was developed and standardized for licensed spectrum (3.5GHz and 2.5Ghz) and for spectrum that it was not clear that the European spectrum regulators would not free up for backhaul services (5.8 GHz).