Study finds PMP for the last mile cuts backhaul TCO up to 50% and boosts ROI

January 20, 2016 // By Jean-Pierre Joosting
The latest point-to-multipoint (PMP) last-mile implementations can reduce backhaul total cost of ownership (TCO) by as much as 50% and generate 1.8x higher return on investment (ROI) for enterprise access — according to findings from the latest Real Wireless report into the cost and time to breakeven of last mile data transport in multiple deployment scenarios.

The study, carried out by independent wireless experts Real Wireless, looks at the TCO of installing and running backhaul networks based on a range of wired and wireless technologies. Analysis found that site-related costs dominate TCO, accounting for around half of a five year TCO. The report revealed PMP solutions offered up to 50% TCO savings over point-to-point (PTP) and managed fibre, largely due the aggregation of multiple links to a single hub site.

For the study, Real Wireless modelled a case study of an ISP, building out a network to supply carrier-grade connectivity to enterprises. It found that PMP microwave and sub-6 GHz resulted in the fastest time to break even, potentially enabling an ISP to connect 67% more customers and generate 1.8x higher ROI compared to PTP equivalents. The report also highlighted the increased revenue possible with PMP at licensed microwave frequencies; this can generate a further 30% higher ROI than PMP in sub-6GHz bands. The increased revenue of PMP microwave was due to its ability to offer both higher capacities and a superior grade of service than its unlicensed equivalent. The ISP model can equally apply to a mobile operator’s network division, where the higher ROI equates to greater financial efficiency and more ability to invest in network footprint.

“The new report highlights the variety of last mile technologies available and how the right choice can almost halve a network’s TCO.” said Oliver Bosshard, Managing Consultant, Real Wireless. “It’s clear from the report that MNOs and ISPs should carefully consider the knock-on impact their choice of technology will have for their future revenues and growth. Particularly in enterprise deployments, operators and ISPs should look carefully at the latest available transport options to determine what will deliver the best business case.”