White Paper

Migrating SONET/SDH to Carrier Ethernet:

A Win-Win for Mobile Service Providers

As mobile service providers adapt their radio access networks (RANs) to incorporate
more bandwidth-intensive services, costs for RAN backhaul are eroding average revenue
per user (ARPU). Because traditional circuit-switched transport architectures are difficult
to adapt for higher data speeds, providers seek alternative ways to scale bandwidth in the
RAN while saving operating expenses.

Migration from SONET/SDH to Carrier Ethernet technology in the RAN for backhaul offers many
benefits for mobile service providers and their customers. This paper presents cost-benefit
analyses and describes Carrier Ethernet solutions that deliver equivalent quality of service (QoS),
®
traffic engineering, and failover performance to previous SONET/SDH solutions. The Cisco
Mobile Transport over Pseudowires (MToP) solution for RAN aggregation, that allows for an
incremental, cost-efficient transition to a Carrier Ethernet RAN without service disruption, is also
described.

Overview
Many mobile service providers are in the process of adapting their RANs to incorporate innovative,
high-speed data services such as third- and fourth-generation (3G and 4G) High-Speed Packet
Access (HSPA), WiMAX, and CDMA Single Carrier Evolved Data Optimized (1xEV-DO). As the
volume of such bandwidth-intensive traffic grows, the costs for RAN backhaul grow
correspondingly, lowering ARPU. Indeed, the average revenue per megabit for data service is far
lower than for traditional voice and text messaging but consumers are demanding mobile
broadband services at affordable prices. Adapting traditional circuit-switched transport
architectures to support these new services is proving cumbersome and expensive. Mobile service
providers are therefore looking for alternative ways to scale bandwidth in the RAN while reducing
their growing operating expenses.

RAN backhaul is one of the last areas of the mobile operator’s infrastructure not yet redesigned to
efficiently handle IP broadband traffic. Cisco is promoting the migration from SONET/SDH to
Carrier Ethernet technology in the RAN for backhaul to significantly increase performance while
lowering operating expense. By migrating to Carrier Ethernet for RAN backhaul, mobile service
providers with either leased or owned SONET/SDH network infrastructures can:

● Save money in the near and long term using packet-switched instead of circuit-switched
connections
● Simplify their operations
● More easily scale their networks
● Increase available bandwidth and add flexibility to bandwidth usage
● Maintain high security, reliability, and availability
● Quickly deploy next-generation IP applications with pseudowires

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By migrating from SONET/SDH to Carrier Ethernet technology in the RAN using IP Multiprotocol
Label Switching (IP/MPLS), mobile service providers can save between 25 to 40 percent in
backhaul costs over a five-year period while increasing speeds up to 10 Gbps. For mobile service
providers, the cost and efficiency benefits are immediate. For those providers that own their
SONET/SDH infrastructures, the efficiency benefits from increasing bandwidth and more easily
deploying 3G and 4G services can be realized right away. Capital expense savings are realized in
the longer term from reduced transmission costs and enhanced profit margins, market share, and
competitiveness.

The right migration solution lets mobile service providers flexibly and cost-effectively evolve to a
packet-based solution while maintaining the familiarity and resiliency of existing TDM and ATM-
based network infrastructures. Such a solution is a part of the Cisco IP Next-Generation Network
(IP NGN) vision and architecture, which is designed to support the ongoing migration from
traditional networks, to hybrid networks with traditional and IP NGN infrastructure, to an eventual
all-IP network. Although Cisco refers to this vision as “next-generation,” this architecture is fully
deployable today for services including Three-Screen IPTV and IP Service Level Agreement
(SLA).

Challenge
The popularity of email, Internet and intranet access, and video sharing on mobile devices is
putting pressure on the existing circuit-switched RAN infrastructures of mobile service providers.
Cisco has found that several mobile service providers on different continents see data traffic
comprising 30 percent of all traffic in 2008 and expect it to be 50 percent of their traffic by 2010.
These same providers anticipate needing to provide 25 Mbps of bandwidth for urban mobile
customers by 2010.

In a typical SONET/SDH network topology, SDH rings connect cell sites and aggregation sites at
STM 1/4 and STM 4/16 speeds (Figure 1). The growth of bandwidth is driving demand for cell
aggregation nodes or cell site gateways. This equipment is responsible for traffic management and
forwarding functions, including grooming, optimization, and data offload. It is deployed at cell sites
or remote aggregation nodes, between base stations and the transmission network.

Figure 1. Typical SDH Topology in the RAN

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With SONET/SDH, increasing the speed of even one ring from STM1 to STM4 could adversely
affect the other rings. With the typical 100 Mbps speeds with Carrier Ethernet services shared,
increasing rates in modest increments will not impact different network layers. The RAN is the
major area of expense because mobile service providers typically have hundreds or thousands of
cell sites, and upgrading gear and increasing bandwidth makes these the most expensive parts of
the network.

Transmission costs account for approximately 19 percent of the overall cost of delivering data to
an end user in today’s 2G and 3G networks, according to 2007 estimates by Unstrung Insider. But
with backhaul architectures based on leased lines, these costs could increase to 80 percent of
operating expenses as cell sites are upgraded to their maximum capacities with current
architectures. Reducing this cost is vital to a provider’s long-term financial stability as traffic
volumes grow and ARPU declines.

The RAN is currently dominated by circuit-switched SONET/SDH technology, an always-on

transport that is much more expensive per bit than Ethernet traffic. With circuit-switched voice, for
example, the line is transmitting all the time, whether or not calls are in progress. When
transporting voice over IP packetized networks, the line is only used when calls are placed and
words are spoken. ATM network overlays were a step toward adapting circuit-switched networks
for packetized voice, changing circuit traffic into packets and back. By redesigning the RAN to
provide packet transport end-to-end, mobile service providers can eliminate the extra ATM layer.
And as voice traffic migrates to IP transport based on Session Initiation Protocol (SIP), IP/MPLS
technology makes it easier to provision, scale, and manage these services.

Solution
Moving to Carrier Ethernet in the RAN brings sizeable cost efficiencies to mobile service providers
with no loss of network performance, stability, or manageability. Cisco’s interim solution for
migrating from SONET/SDH to Carrier Ethernet in the RAN relies on the use of pseudowires and
the intelligence of IP/MPLS technologies. The widely used Cisco 7600 Series edge router has
been engineered as a multiservice RAN solution to transport TDM traffic from the access layer to
the core over IP Carrier Ethernet transport.

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By upgrading to Ethernet (Figure 2), SONET/SDH is only in the network core and IP is transported
over dense wavelength-division multiplexing (DWDM). At the RAN edge, Gigabit Ethernet rings
connect with cell sites to the aggregation sites over IP routers at 10 Gigabit Ethernet speeds.
Carrier Ethernet lets mobile service providers cost-efficiently upgrade and scale bandwidth
speeds, port densities, and any link, node, or other part of the network. With Carrier Ethernet,
providers pay a per-port cost monthly and only for actual traffic. This contrasts with T1 or E1 lines
that require set monthly fees for bandwidth that is always on.

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Figure 2. Ethernet Topology in the RAN

Benefits of Carrier Ethernet in the RAN include:

● The reliability of SONET/SDH but at lower cost

● Faster speed of deployment
● Easier scaling to Gigabit Ethernet speeds
● Easier planning for traffic usage and classes of service
● With IP-based voice or data in an MPLS network, packets can be routed without first
sending them between ATM and SDH elements

Maintaining High Availability

Mobile service providers require failover times of less than 50 milliseconds in the RAN. To
implement this, three different protocols can be used in an IP RAN with Carrier Ethernet transport:
Layer 2 Metro Ethernet, IP/MPLS, or T-MPLS and Provider Backbone Transport (PBT), as shown
in Figure 3.

Figure 3. Protocol Choices for Fast Failover in the RAN

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● Layer 2 Metro Ethernet in the RAN uses Resilient Ethernet Protocol (REP) for failover that
is typically 50 milliseconds and under but not guaranteed. This solution uses Metro
Ethernet switches that are less expensive than those used with IP/MPLS and provide end-
to-end intelligent features.
● IP/MPLS in the RAN brings intelligent features such as traffic engineering and Fast
Reroute throughout the network. With Fast Reroute, 30-millisecond failover and under is
guaranteed. This feature is based on pre-Forward Error Connection. Packets are analyzed
as they arrive at routers to see if they are corrupted even before a link is broken or goes
down. If error level is rising, Fast Reroute reroutes the packets over the MPLS network,
allowing for packet correction and recovery.

Cost Analyses
A CDMA network in the United States with both 1xRTT and EV-DO equipment requires between
four and eight T1 lines per single operator for a typical midsized cell site. A GSM/UMTS network,
with both GSM and UMTS deployed, requires two to four T1 lines for GSM voice plus two to four
T1 lines for UMTS. Average cost is US$250 per month for each T1 line, or $24,000 per year for a
typical U.S. cell site. European sites face similar total costs. Each typically requires one to three
E1 lines for UMTS per midsized cell site. Average cost is $800 per month for each E1 line or
$24,000 per year for Europe. In other countries, these costs could be much higher.

If traffic levels grow, this model for backhaul will become extremely expensive. If a UMTS 3G
network requires 10 Mbps of bandwidth, T1 requirements would grow from three to eight,
increasing monthly costs from $750 to $2000 per month. In Table 1 is an example of a mobile
service provider in Europe with 10,000 cell sites doubling bandwidth per cell sites to support
HSPA. Leased line costs for E1 lines would double.

Table 1. Current Leased Line Costs in a 10,000 Cell Site Mobile Network

Network Types Capacity Price per E1 per E1 Costs per Across 10k Sites E1 Costs per Year
Requirement Month Month per Month

GSM 2 x E1 $800 $1600 $16 Million $192 Million

WDCMA 2 x E1 $800 $1600 $16 Million $192 Million

Total 4 x E1 $800 $3200 $16 Million $384 Million

Source: Light Reading/Unstrung Insider 2007

As bandwidth requirements grow and more T1 and E1 leased lines are required, the costs go up
dramatically, as shown in Table 2.

Table 2. Future Leased Line Costs in a 10,000 Cell Site Mobile Network

Network Types Capacity Price per E1 per E1 Costs per Across 10k Sites E1 Costs per Year
Requirement Month Month per Month

GSM 2 x E1 $800 $1600 $16 Million $192 Million

WDCMA 6 x E1 $800 $4800 $48 Million $567 Million

Total 8 x E1 $800 $6400 $64 Million $768 Million

Source: Light Reading/Unstrung Insider 2007

Figure 4 shows how costs for T1 leased lines dramatically increase and DS3 connections remain
expensive as compared to Ethernet connections when bandwidth requirements grow.

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Figure 4. Bandwidth Costs with T1, DS3, and Ethernet Transport

Source: Unstrung Insider Vol 6, No.2, February 2007

Cisco analyzed the cost comparisons of SONET/SDH backhaul in the RAN and different types of
Carrier Ethernet for backhaul (Table 3). The model shows that Carrier Ethernet with IP/MPLS
provides a total savings in cost of ownership of 25 percent to 40 percent over a five-year period.
The analysis does not include the cost of building the initial network infrastructure, but rather
operating it using different transport scenarios in the RAN.

Table 3. Analysis of Mobile Operator with Different RAN Backhaul Solutions

RAN Backhaul Total Cost of Ownership*

SONET/SDH $102,364,495

All-Ethernet solution where traffic from the base station is encapsulated within $64,048,061
pseudowires and transported across the IP/MPLS core

All-Ethernet solution where pseudowires extend to the cell site and transport traffic $39,583,089
across the IP/MPLS core

*Capital and operational costs are amortized over the lifetime of a project and expressed as a total cost of
ownership amount.

Cisco Mobile Transport over Pseudowires for RAN Backhaul

To migrate to Carrier Ethernet in the RAN, Cisco has engineered the Cisco MToP solution, using
MPLS technology to extend the packet-based core already deployed by many mobile service
providers out to the edge of the network. MToP pseudowires—which are MPLS virtual circuit
“tunnels”—aggregate and transport TDM, IP, Ethernet, and ATM traffic as well as clock
synchronization from the RAN to the network core. The solution increases bandwidth available for
backhaul and other services by an order of magnitude but at one-tenth of the cost per bit when
compared to T1 and E1 service. It is fast and easy to deploy. Another benefit is that the Cisco
MToP solution makes use of the existing MPLS infrastructure for the highest levels of traffic
grooming and network management, QoS, and the ability to assign classes of service.

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With Cisco MToP in the RAN, ATM switches in the RAN can be removed. Cisco 7600 Series
routers, equipped with Cisco Circuit Emulation over Packet (CEoP) shared port adapter (SPA)
cards, handle transport of all traffic types and interface with all existing SONET/SDH gear, as
shown in Figure 5.

Figure 5. MToP in the RAN Solution in a GSM Network

The routers can efficiently transport traffic from aggregation and preaggregation sites at Gigabit
Ethernet speeds while saving on E1 and T1 circuits. The solution provides clock recovery over
Ethernet and IP, with clocking derived from the network core over the pseudowires.

Conclusion
With SONET/SDH equipment vendors aware of the progression of more services to IP and the
growing bandwidth demands with multimedia applications, the end of SONET/SDH is coming.
Rather than waiting for spiraling bandwidth costs and instead of investing in equipment with a
limited future, mobile service providers should consider a strategy for revamping their RAN
backhaul.

Migrating to Carrier Ethernet from SONET/SDH in the RAN simplifies optical network planning and
deployment, makes for faster and easier changes to traffic and network topology, and saves
significant costs related to Layer 2 and Layer 3 equipment required for ring interconnection.
Management of wavelengths is as simple as management features available with SONET/SDH.

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With the Cisco MToP solution, mobile service providers can cost-effectively migrate their hub-and-
spoke network architectures to a meshed network edge, with IP/MPLS Layer 3 routing intelligence
moving throughout the network from core to cell site. A single combined network, using MPLS both
in the core and RAN, can simplify operations and lower operational expenses. By using a
standards-based MPLS Pseudowire solution, additional bandwidth can easily and flexibly be
added to cell sites and aggregation sites as needed. Network resiliency is not sacrificed through
the use of MPLS traffic engineering and Fast Reroute. Network synchronization is supported
through the use of Timing-over-Packet (Circuit Emulation over Packet Switched Networks) so that
GSM radio equipment can still be provided a timing source. Cisco’s RAN Optimization solution can
also be used for additional bandwidth savings as required.

Cisco is at the forefront of assisting mobile service providers in adapting their RANs to provide
innovative high-speed data services, taking full advantage of the IP Next-Generation Network to
reduce expenses while bringing new, carrier-class services to mobile customers. Specific benefits
of Cisco solutions include the collapse of backhaul technologies onto a single IP/MPLS network,
reduced operating costs, rapid provision of bandwidth to support new services and service growth,
seamless support of 2G/3G/4G radio technology, and the ability to take advantage of alternative
transport media (such as Ethernet and DSL) for additional cost savings. Cisco solutions provide
carrier-class IP security and extend Cisco’s carrier-class network management system to the RAN.

For More Information

Overview of MToP:
http://www.cisco.com/en/US/netsol/ns675/networking_solutions_solution_category.html

MToP in the RAN Brochure:

http://www.cisco.com/en/US/solutions/collateral/ns341/ns523/ns675/ns732/net_brochure0900aecd
805c4ef1.pdf

Printed in USA C11-485114-00 07/08

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