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Mobile Industry Faces $9.2 Billion Shortfall In Backhaul Investment, Tellabs Study Finds

Stocks in this article: TLAB

NAPERVILLE, Ill., Feb. 13, 2013 /PRNewswire/ -- Operators are investing in radio network upgrades and migrating to LTE to meet surging user demand for mobile data.

But a report unveiled today predicts that operators will face a new mobile capacity crunch by 2017. The Strategy Analytics study reveals that operators may not be planning sufficient investment in backhaul to meet anticipated demand over the next 5 years. Specific information related to the report is available at Tellabs stand at Mobile World Congress 2013, Hall 6, Stand 6E10, and as follows:

Global mobile data traffic has increased 13 times in the last 5 years and Strategy Analytics forecasts it to grow by 5 to 6 times more by 2017. The Tellabs-commissioned study predicts a $9.2 billion global backhaul funding gap with a 16 petabyte shortfall in backhaul capacity by 2017.

Investment and capacity shortfalls vary by region (calculated as necessary backhaul expenditure minus current planned operator investment):

  • Asia PacificUS$5.3 billion; 9.4 Petabytes
  • Middle East Africa – US$1 billion; 1.8 Petabytes
  • Western EuropeUS$1 billion; 1.8 Petabytes
  • North AmericaUS$650 million; 1.2 Petabytes
  • Caribbean/ Latin AmericaUS$600 million; 1.1 Petabytes
  • Central & Eastern EuropeUS$580 million; 1 Petabyte.

Inadequate backhaul will cost confidence and customers

When mobile data usage first surged in the late 2000s, backhaul investment was an afterthought. But as smartphones took off, the unexpected traffic produced network congestion and outages that created major customer dissatisfaction. As much as 50% of the problems were attributable to inadequate backhaul.

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