According to a new report, the rise in global data traffic could lead to a capacity crunch for operators by 2017.
The Strategy Analytics report reveals that the mobile capacity crunch can be prevented by increasing traditional backhaul investment levels to match the expected rise in Radio Access Networks (RAN) capacity and user traffic.
According to the report, a deficit of 16 petabyte in backhaul capacity represents a global backhaul funding gap of about $9.2bn.
Strategy Analytics Wireless Operator Strategies director, Phil Kendall, said that as many as 40% of mobile users list poor network performance as a key reason for leaving an operator.
"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," Kendall said.
The ‘Backhaul Gap’ is expected to lead to customer churn with about half of the issues related to network performance predicted to arise from congestion.
The report suggests an opportunity for mobile operators to distinguish themselves significantly over their rivals through investments in smart backhaul.
Strategy Analytics Service Provider Analysis director, Sue Rudd, said that to optimise the required investment and handle the traffic throughput for new RAN we need backhaul solutions that are both smarter and more cost effective.
"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," Rudd said.
"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.
Ofcom is already preparing for a 5G future after predicting that consumers will use more than 80 times the amount of mobile data they use today.
