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Broadband Access
Verizon’s Backhaul Bonanza
Cites Growing Demand For Alternative Solutions
by Sean Buckley
Verizon Partner Solutions, the wholesale arm of Verizon Communications,
is no stranger to the wireless backhaul space.
In fact, Jim Stoltz, senior product manager for Verizon Partner Solutions,
points out that wireless operators are outpacing the demand of their
traditional carrier customers for new bandwidth solutions.
“What I find really interesting is if I look at the wholesale space, the top
of the revenue-generation list was dominated by IXCs until recently,”
said Stoltz speaking on the Telecommunications Magazine and Infonetics
Research jointly hosted panel IP/Ethernet to the Rescue: Are
Pseudowires Enough? at last week’s CTIA show in Orlando, FL. “In the
past two years, I have seen those IXCs be displaced by wireless
providers in revenue generation for T1 backhaul solutions, so it’s a very
important revenue source for us.”
To meet the ever-growing demands of its wireless wholesale customers,
Verizon Partner Solutions is leveraging various fiber and copper-based
IP/Ethernet technology options.
Extending FTTP
While Verizon Partner Solutions plans to deliver Ethernet over its existing
copper network facilities, the initial focus is on fiber-based Ethernet
backhaul services.
To deliver its fiber-based ETAG (Ethernet Transport and Aggregation)
backhaul service, which it plans to launch later this year, Verizon Partner
Solutions will leverage its ongoing FiOS FTTP (fiber-to the premise) BPON
and GPON network investments and pseudowire technology.
Since launching its FTTP (fiber to the premise)-based network in 2004,
Verizon now passes more than 6 million homes and businesses with fiber
and it expects to pass about 18 million premises by the end of 2010.
Given the amount of fiber Verizon is plowing into the ground to deliver its
FiOS FTTP premise service to residential and business users, it makes
logical sense to extend those assets to cell towers as another potential
revenue source.
“As we bring fiber to the home, we also pass a great deal of cell sites,”
said Stoltz.
Stoltz says that he’s currently testing equipment in the lab that takes
both PON and pseudowire hardware to create an MPLS-based backhaul
solution for wireless carriers.
ETAG, however, is one leg in the stool of Verizon’s overall IP/Ethernet
strategy. In addition to ETAG, Verizon Partner Solutions plans to
introduce its Packet Access Service, a TDM-based pseudowire solution.
“What we’re doing over the course of the next five years or so, is
migrate both the legacy and emerging services onto a single packet-
based platform,” said Stoltz. “The TDM psuedowire and Ethernet-based
pseudowire solutions will traverse the same network.”
A Revenue Conundrum
Although Ethernet holds great promise, it represents a minor sliver of
Verizon Partner Solutions’ overall revenue base from wireless carriers.
Right now, the bulk of Verizon Partner’s wholesale wireless backhaul
revenue comes from traditional TDM-based T1 and DS1 circuits—a
revenue source that it’s reluctant to slip through its fingers.
“It really presents a conundrum for us because if you look at our revenue
base it’s mostly T1 and DS1, and there’s a perception in the market that
Ethernet backhaul is more cost effective and a lot cheaper on a per-
megabit basis,” said Stoltz. “What I am really tasked with doing is
replacing our copper bread and butter services with something with a lot
less revenue.”
Stoltz added, however, that there’s an upside for the demand for
Ethernet-based transport: “The advantage that I do have with regards
to the wireless backhaul market, in particular, is that market is growing
soo quickly,” he said. “While initially on a per-megabit basis is lower, we
see that as growing over the years so it will eventually be higher than
DS1 services.”
At the same time, the demand for alternative wireless backhaul solutions
continues to grow. Driven initially by smaller operators, Stoltz says the
largest wireless operators are asking for alternative solutions.
Technology, however, is not the only facet driving Verizon Partner
Solutions to develop new backhaul solutions.
“The consumer side of the cable companies have been taking wireline
business away, and now they are branching into the Ethernet backhaul
market,” said Stoltz. “What we’re doing at Verizon is to develop Ethernet
solutions that can stem that competitive pressure.”
More Information:
CTIA: CDMA Revs Up (Part I of II)
Industry Group Sees Continued Growth, New Services
MSF To Test IMS/NGN Products
MultiService Forum Expands Responsibilities; Aims To Certify IMS Products By 2008
AT&T Sets Sights On Digital Home Opportunity
Focuses On Increasing Bandwidth, Network Visibility
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