You are on page 1of 6

Hosted

mobile core:

A path to LTE for


regional providers
STRATEGIC WHITE PAPER

As subscribers become more demanding of their mobile devices, including robust


Internet access and real-time, rich multimedia communications, the need for wireless
network operators to add capacity and multimedia support features is no longer a
nice-to-have; it is an imperative. However, as the need to get serious about LTE
deployments becomes more obvious, much of the discussion around supporting
LTE services is focused on RAN issues such as small cell deployments and spectrum
constraints. While vitally important, the need to support ubiquitous broadband access
via radio links also mandates that those links be supported with equally robust backhaul
and mobile core networks. Without these latter two pieces, the mobile broadband
service delivery model breaks.
To help overcome the high cost of deploying, maintaining and operating LTE networks,
a variety of wholesale backhaul and site sharing schemes are being utilized to defray
costs in the RAN and backhaul. However, this still leaves the daunting challenge of
building, maintaining and operating a next generation mobile core or evolved packet
core (EPC) unaddressed. The focus of this paper is to examine shared, or hosted,
core opportunities that can be particularly useful to smaller, regional wireless service
providers as they seek to provide cutting edge mobile broadband services to their
customers and compete with large national incumbent operators.

Description What is an Evolved


Packet Core?
At a high level, an EPC network contains the following
network elements:

Packet Gateway (PGW) Serves as the IP anchor point for bearer networks.

 erving Gateway (SGW) Acts as the local mobility anchor for inter-eNode B
S
(i.e. LTE base station) handoffs.

 obility Management Entity (MME) Handles inter-core network node


M
signaling for mobility between 2G, 3G and LTE bearers.

 ome Subscriber Server (HSS) Houses authentication, location tracking


H
and subscriber subscription data.

 ubscriber Profile Repository (SPR) Houses subscription data for policy


S
and charging.

 olicy and Charging Rules Function (PCRF) Controls QoS resources for policy
P
decisions such as gating, flow based charging, etc.

EPC deployment drivers


Although 3G rollouts might have been the rifle shot that started the smartphone
revolution, LTE will clearly be the key enabler of widespread adoption. As of the end
of 2011, it became equally clear that LTE was in the near-term deployment plans for
operators around the world. Consider the following statistics:
LTE services launched by 49 operators in 29 countries.

226 operators in 76 countries committed to LTE as their path to 4G.

LTE subscribers forecast to exceed 597 million in 2016. (see chart below)
WORLDWIDE LTE SUBSCRIPTIONS
700

Subscriptions (millions)

600
500
400
300
200
100
0
2010A

2011E

2012E

LTE
Source: Pyramid Research, 2011

Hosted Mobile Core: A path to LTE for regional providers


ALCATEL-LUCENT WHITE PAPER

2013E

2014E

2015E

2016E

As LTE is increasingly deployed and smartphones become more widely adopted, the widely
recognized Y chart (as depicted below) illustrates the disconnect occurring between data traffic
and operator revenue that will only become more pronounced.

Quantity

Traffic

Cellular operator
revenue and
traffic
decoupled

Voice
dominant

Revenue
Data
dominant
Time
Source: Heavy Reading, 2011

Compounding the problem is that as LTE radio networks are built out, the need for a robust
mobile core becomes paramount. Of course, the challenge then becomes how to pay for robust
RAN, backhaul and core assets in the face of a rapidly deteriorating economic model.

Hosted Mobile Core: A path to LTE for regional providers


ALCATEL-LUCENT WHITE PAPER

The end-to-end path


One way to achieve cost synergies is to select an equipment supplier that can provide a
turnkey solution. Alcatel-Lucent is one of the few vendors in the world today that can
supply a truly best-of-breed LTE solution encompassing all of the required RAN, backhaul,
core and professional services elements.

DEVICES

ACCESS

BACKHAUL

EPC

TRANSPORT

IMS

APPS
ENABLEMENT

END-TO-END MANAGEMENT

END-TO-END SUBSCRIBER MANAGEMENT

Risk mitigation delivery of fully tested solution

Faster time to market (time to money)

Synergized architecture and requirements

Fewer northbound interfaces per OSS

Instrument-rich network architecture (e.g. per


call measurement data, visibility into devices)

Reduced OAM interfaces with common functions

New business models

Validated ecosystem

Faster problem resolution

Going this route contains many benefits to the operator including:


Risk mitigation via delivery of a fully tested solution.

Synergized architecture and requirements.

Faster time to market which enables faster time to money.

Fewer northbound interfaces per OSS.

Reduced OAM interfaces with common functions.

Faster problem resolution and streamlined network optimization.

Validated ecosystem.

Hosted Mobile Core: A path to LTE for regional providers


ALCATEL-LUCENT WHITE PAPER

Alternative paths: The benefits of a hosted core


For many regional operators, however, self-funding an entire end-to-end LTE network is an
untenable option. In such cases, Alcatel-Lucent can also serve as a key partner in helping to take
advantage of a hosted core solution.
At its root, a hosted core solution can be structured in approximately the following manner:

Local operator purchases RAN.

A regional network operator buys core.

Regional operator and a number of localized operators share core resources.

In the scenario described above the regional operator could consist of a holding company
that owns several wireless properties across a particular region of the country. Additionally,
consortiums of smaller operators have been known to band together to purchase large backbone
networks, which are then shared by the operators in the consortium. The same concept can be
applied to a hosted core arrangement.
The economic benefits associated with going the hosted core route can be dramatic, as
depicted below.

SEVERAL MILLION DOLLARS

RAN

&

Core

Engineering
services

UP-FRONT CAPEX SAVINGS OF $1.5 MILLION OR MORE!

Hosted Mobile Core: A path to LTE for regional providers


ALCATEL-LUCENT WHITE PAPER

50-60% LESS

CORE RENTAL
(Its
really tiny!)

Success in action: West Central Wireless; San Angelo, Texas


Starting with Analog Mobile Phone Systems 20 years ago, West Central Wireless has progressed
to offering TDMA- and CDMA-hosted services to neighboring rural cellular operators. They are
currently implementing an Alcatel-Lucent LTE EPC consisting of a HHS, S-Gateway (S-GW),
P-Gateway (P-GW), charging gateway, MME and aggregation router. Concurrently, they are in
process of finalizing hosted EPC agreements with neighboring carriers.
With relatively affordable transport, why would a rural carrier want to purchase and maintain an
expensive gateway and backhaul LTE signaling, when they can leverage signaling capacity from an
existing hosted solution provided by an experienced hosted solution provider?, said Griff Griffen,
technical operations manager at West Central Wireless.Alcatel Lucents Advanced Network
Management capability allows for view only access and full control over their eNodeB.
West Central Wireless completed installation of their EPC in June and currently has one LTE test
site on the air. Given the uncertainties related to LTE handset availability and interoperability, their
initial Q4 2012 deployment will consist of fixed LTE data services targeting small business with
wireless modem-type devices.
In addition to price, Griffen said that backhaul cost and experience providing hosted solutions
tend to be the key criteria carriers use for making a hosted solution decision. Customers data
usage will start ramping up as they start using Hulu and Netflix on mobile devices. With limited
capex, most rural carriers are going to be looking for capex savings options and a hosted EPC
solution will reduce capex while allowing carrier to allocate investment in cell site backhaul and
BST capacity to meet customer mobile data demand.
About West Central Wireless
In July 2012, San Angelo, Texas-based, West Central Wireless celebrated its 25th year anniversary,
as a Central Texas coop owned, rural cellular operator. Today they have 40,000 subscribers and an
estimated 200 cell sites, of which roughly 60% are owned and operated by West Central Wireless.
Why do you believe it is important for rural carriers to offer LTE?
Rural America needs access to high speed, broadband, data services. And for rural carriers to
survive they need to be able to deliver these services to their customers. Moreover, rural America
needs rural carriers to survive. LTE is the logical and economical delivery mechanism for these
services.
Why should rural carriers consider hosted EPC?
The heart of a LTE network is the EPC which requires a significant capital investment to
purchase and install and an ongoing operational commitment and expense to maintain. As cost
reimbursement mechanisms continue to become unstable it is not feasible for many rural carriers
to make this financial commitment. The modular architecture of the EPC makes core hosting a
viable solution for these carriers.

Hosted Mobile Core: A path to LTE for regional providers


ALCATEL-LUCENT WHITE PAPER

You might also like