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Verizon Rents Out Its Fiber for LTE Backhaul

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We’ve noted that Verizon (s VZ) plans to use its fiber network for backhaul for its future Long Term Evolution network, and today it says that it will also rent out capacity on that fiber network to other wireless carriers as well. As our readers are quick to point out, backhaul is the elephant in the room when we talk about fast wireless data, because no matter how much capacity and speed can be theoretically delivered over the air, there’s still the matter of connecting a cell site back to the Internet.

With a T-1 connection or some other setups, reaching LTE’s theoretical speeds of 150 Mbps down is beyond ridiculous — and even the more realistic speeds of 10 Mbps down are unlikely. This makes backhaul the kink in the hose that can slow data speeds for wireless networks to a trickle. Fiber to a cell site is one option, and since Verizon is spending billions building out its FiOS network, it may as well rent out capacity to others and make some money off its $19 billion investment.

Verizon will offer access to its fiber networks through its Verizon Partner Solutions business. There are three options: Switched Ethernet Service, an all-Ethernet option, and an Ethernet over SONET choice. Verizon says that in each case data from the cell site is converted immediately to packetized data for transport to mobile telephone switching offices for distribution over appropriate networks.

10 Responses to “Verizon Rents Out Its Fiber for LTE Backhaul”

  1. In my travels over the past 24 months selling to the Telcos (Wireline and Wireless) all over the world, all of them were on the quest to monetize any investments they have made or were going to make in their networks/backhaul. They talked of IPTV/Video as one of the ‘applications’ on their network to utilize and hence monetize their network and the other equally important one was the Wireless traffic. One operator in India was particularly very serious and in fact structured organizationally to do this. However they (i.e. Operator in India) were not thinking as far out as renting out the network!

  2. Provacative question….

    If Verizon and AT&T own a majority (oh, let’s say 90% of access to the towers) of the landline connections to the towers (except for some Sprint access), aren’t all wireless carriers simply a wholesale purchaser of AT&T or Verizon?

    Meaning, if this duopoly owns the access and have wireless business units and someone is trying to build a new wireless company, that new wireless company is simply funding their competitor’s expansion and capital funding needs of the wireless business units of AT&T and Verizon.

    ahh, the heck with it…seems too complicated to me…making my head hurt.

    • Michael Yokitis

      My take on it is that sure, “that new wireless company is simply funding their competitor’s expansion and capital funding needs of the wireless business units of AT&T and Verizon.”

      But I think the converse is also true, that by providing high-bandwidth backhaul for next-gen w’less data services, VZ & T are helping enable startups who are trying to take their customers.

      Works both ways. Quite interesting in that regard.

  3. Jesse Kopelman

    Cable companies do this with their fiber networks, as well. Advantage of Verizon though is that they are already selling backhaul to all the carriers via their copper plant, so major business relationships are already in place.