A wireless relay serves a first User Equipment (UE). A first eNodeB in the relay wirelessly exchanges UE signaling data and UE user data with the first UE. The first eNodeB processes the UE signaling data to generate S1-MME signaling data and exchanges the S1-MME signaling data with a second UE in the relay. The first eNodeB processes the UE user data to generate S1-U user data and exchanges the S1-U user data with a Local Serving Gateway (L-SGW) in the relay. The L-SGW terminates the S1-U user data to generate non-General Packet Radio Service Transfer Protocol (non-GTP) user data. The L-SGW exchanges the non-GTP user data with the second UE in the relay. The second UE compresses/decompresses the non-GTP user data and the S1-MME signaling data. The second UE wirelessly exchanges the compressed non-GTP user data the compressed S1-MME signaling data with a second eNodeB.