Verizon lays fiber to 1000 cell sites
Though still far from its goal of covering 90% of the cell sites in its territory, Verizon has made a dent and will cover 25 to 30 major markets next year to support VZW’s 4G launch
Six months after committing to a major fiber-to-the-tower buildout throughout its territory, Verizon (NYSE:VZ, NYSE:VOD) has connected more than 1000 cell sites with fiber Ethernet services and is on track to fully support subsidiary Verizon Wireless’ (NYSE: VZ, NYSE:VOD) long-term evolution launch with high-capacity IP backhaul next year.
“We have sites online right now,” said Daniel Llamas, director of the fiber-to-the-cell-site program for Verizon Partner Solutions. “We’ve broken ground and the network is going. We’ve made it very clear we’ll be in 25 to 30 markets next year.”
Verizon has committed to deploying fiber Ethernet to the 90% of the cell sites in its territory by the end of 2013, closely following VZW’s LTE rollout schedule. But Llamas said that the fiber-to-the-cell deployment won’t solely benefit Verizon Wireless. As Verizon’s wholesaler, Partner Solutions sells to all of the operators in its territory and is in discussions with multiple customers about fiber and Ethernet backhauls services, he said. While deploying to VZW’s cell towers, those sites typically have four or five other operators, many of which are experiencing capacity spikes from increased 3G usage. Some of the operators are planning to take advantage of any fiber services available soon, Llamas said, while others are waiting.
“Each of them have their own time frames,” Llamas said. “Some carriers, who are ready for 4G, are getting ahead of the curve, but there are other carriers who aren’t ready yet.”
In recent months, wireline operators have gotten religion about high-capacity backhaul. Both Qwest (NYSE:Q) and Level 3 (NASDAQ:LVLT) have launched fiber-to-the-cell initiatives, using different infrastructure to target different deployment scenarios. Qwest is using its fiber-to-the-node network as a gateway to cell towers dispersed throughout its residential footprint. Meanwhile, Level 3 is targeting rural and small town cellular networks by tapping into its in-line optical amplifiers spaced every 60 miles or so along its fiber backbone routes.
Some Ethernet vendors, too, have started seeing the demand for high-capacity backhaul affect their bottom line. Ciena (NASDAQ:CIEN) saw a 70% increase in Ethernet equipment revenues driven mostly by mobile backhaul deployments. Ethernet-over-copper vendor Hatteras said carriers deploying Ethernet-over-TDM links were a key component of its growth in 2009, as operators tried to milk more capacity from their T-1 links.
But other vendors said declaring 2009 the year of fiber Ethernet is premature. Much of Ciena’s favorable quarter was driven by sales to Clearwire (NASDAQ:CLWR), which is building a high-capacity Ethernet backhaul network, not with fiber, but with IP point-to-point radio, while Hatteras switches are targeted at same T-1 lines that already feed the vast majority of cell sites today. Optical Ethernet supplier MRV Communications isn’t seeing a huge uptick in the fiber backhaul spending, though interest in the technology has definitely increased, said Brandon Pemberton, its chief technology officer.
“We’ve seen a lot of [requests for proposals] but not a lot of dollars for backhaul,” Pemberton said. “I think operators are just now getting to that comfort level. Most of the Tier 1s are now moving their pilots into real trials.”
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