Qwest Communications (Q) introduced a new fiber-based Ethernet backhaul wholesale service for wireless operators. The service is called Qwest Mobile Ethernet Backhaul, which leverages the company’s fiber-to-the-node (“FTTN”) network (currently used for residential broadband service) to extend fiber connections to cellular sites. This will offer the wireless operators a major upgrade from their existing copper-based wireless backhaul networks.
 
Cellular operators across North America are aggressively investing to replace their copper connections to faster fiber optic connections. Approximately 75% of backhaul connections are on copper in North America, thereby creating a significant bottleneck in supporting increasing data traffic on next-generation wireless networks. Tier-1 carriers such as AT&T (T) and Verizon (VZ) have started to upgrade their cell sites to fiber as they prepare for 4G wireless service deployments. 
        
Mobile Ethernet Backhaul service is tailor made to fit the requirements of the wireless service providers, addressing their demand for higher bandwidth for 3G as well as more advanced 4G wireless services such as the Long Term Evaluation (“LTE”) and WiMAX.
 
The new backhaul service enables the wireless carriers to expand the capacity to cell sites to meet the requirements for bandwidth-intensive multimedia devices and applications including smartphones and netbooks. Instead of upgrading networking equipments to boost capacity, operators can manage bandwidth through software, resulting in meaningful cost savings and faster service deployments.
 
Qwest remains more challenged than the other regional telephone companies in the US such as AT&T and Verizon given the lack of its own wireless and video services. The company’s traditional local phone operation remains under pressure due to the growing presence of competitive service offerings such as cable TV, wireless and Voice-over-Internet Protocol (“VoIP”). Access line losses continue to be the base reason for persistent decline in overall revenues.   
 
Qwest is aggressively investing in deploying additional FTTN capabilities to boost its broadband network performance. Mobile Ethernet Backhaul represents an extension of its FTTN footprint to cellular communications, creating a fresh business opportunity that may fetch significant revenues moving forward.
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