By Richard Webb, research director, mobile backhaul and small cells, IHS Markit
- The outdoor small cell backhaul market accelerated in 2016, with revenue growing more than 200 percent year-over-year
- Just over $5 billion will be spent globally on outdoor small cell backhaul equipment from 2016 to 2020
- By 2020, deployments of outdoor small cell backhaul connections are projected to approach nearly 700,000
The small cell backhaul market is still in experimentation mode and has been since early trials commenced in 2013. Market growth started to look more meaningful this year—with revenue up 233 percent year-over-year, albeit from a very modest base—but we anticipate the market to really kick into higher gear in 2018.
IHS Markit is forecasting that a cumulative $5.1 billion will be spent worldwide on outdoor small cell backhaul equipment between 2016 and 2020, driven by an increasing number of mostly modest-scale projects to augment 3G and Long Term Evolution (LTE) capacity in urban areas and to provide mobile coverage in rural markets. The compound annual growth rate (CAGR) for the five-year period is 78 percent.
It’s worth noting that the $5.1 billion for outdoor small cells is in addition to the nearly $43 billion that’s being spent on macrocell backhaul equipment during the same five-year period.
Deployments of outdoor small cell backhaul connections are expected to grow to 109,000 in 2016, up from 35,000 in 2015. And by 2020, deployments are projected to reach 693,000—for a total installed base of around 1.9 million.
Wireless microwave makes up nearly 60 percent of small cell backhaul gear revenue today, climbing to over 80 percent in 2020 led by E band millimeter.
Geographically, small cell deployments generally reflect the regional share of the overall mobile infrastructure market. By 2020, the regional breakdown for small cell backhaul equipment will be: Asia Pacific (48 percent), Europe, the Middle East and Africa (27 percent), the Caribbean and Latin America (14 percent) and North America (11 percent).
Small Cell Report Synopsis:
The IHS Markit biannual small cell mobile backhaul equipment report tracks equipment used for transporting traffic from outdoor small cell sites, such as those attached to light poles, utility poles, and the sides and tops of buildings. It provides worldwide and regional market size, forecasts through 2020, analysis and trends for equipment, connections and cell sites by type. The report covers equipment including digital subscriber line (DSL) modems and digital subscriber line access multiplexers (DSLAMs); Ethernet over copper and fiber; <6GHz microwave; point-to-point (P2P) microwave; point-to-multipoint (P2MP) microwave; and licensed and unlicensed millimeter wave.
For information about purchasing this report, contact the sales department at IHS Markit in the Americas at (844) 301-7334 or [email protected]; in Europe, Middle East and Africa (EMEA) at +44 1344 328 300 or [email protected]; or Asia-Pacific (APAC) at +604 291 3600 or [email protected]
Separately, a report “Mobile and Wireless Backhaul Market – by Equipment (Microwave, Millimeter Wave, Sub 6 GHZ, Test and Measurement), by Services (Network, System Integration, Professional) – Worldwide Market Forecasts and Analysis to 2015 – 2020″, the market is estimated to grow from USD 17.85 Billion in 2015 to USD 33.15 Billion by 2020, at an estimated compound annual growth rate (CAGR) of 13.18% from 2015 to 2020.
The growing need to remain connected and increasing adaption rate of 3G and 4G (Long-Term Evolution) networks has enhanced the market of mobile and wireless backhaul. Increasing usage of smart phones and tablets has increased the mobile data traffic and this has fueled the market for a fast and reliable connectivity. Technical advancements such as small cells, has to quench the high bandwidth needs.
Growing mobile data traffic is spurring the market of mobile and wireless backhaul
Nowadays, spectrum band has been increased to up to 42GHz owing to the need for faster connectivity. Also, the introduction of 5G is offering great opportunity for mobile and wireless backhaul market. Popularity of data exhaustive such as video on demand, online streaming and video connectivity is continually growing and driving the mobile traffic data. The installation of small cells enables the network operators to offload the mobile data on the unlicensed spectrum using Wi-Fi, hence reducing the congestion on the macro-cells and licensed spectrum.
The microwave equipment segment is estimated to account for majority of the total mobile and wireless backhaul market in 2015, but is slowly losing its market share because of the increasing adoption of millimeter wave equipment. The major trends seen in the service market are the increasing use of system integration services by end user to effectively deploy mobile and wireless backhaul solutions and the easy integration of these solutions with the existing ones.
The North America region is expected to contribute the maximum market share to the overall mobile and wireless backhaul market
North America will witness the highest market share in 2015, and will continue to dominate the globe during the forecast period. The mobile and wireless backhaul markets in Asia-Pacific (APAC), Middle East and Africa (MEA), and Latin America are expected to witness substantial growth, as large enterprises as well as SMBs are yet to adopt the solutions. Major enterprises in these emerging economies are expected to increase investments in mobile and wireless backhaul solutions, due to the huge demand for managing aging infrastructure and assets.
The major vendors in the mobile and wireless backhaul market include Alcatel Lucent, Cisco Systems, Ericsson, Huawei Technologies, Broadcom Corporation, Brocade Communications Systems, Fujitsu, Nokia Networks, Tellabs, and ZTE Corporation. A detailed analysis on key industry players is done to provide key insights about their businesses, products and services, key strategies, and recent developments associated with the mobile and wireless backhaul market.
The mobile and wireless backhaul market has been segmented into equipment, services, and regions. The equipment is further segmented into Microwave, Millimeter wave, Sub 6 GHz, and Test and Measurement. The service types are Network services, System Integration, and Professional Services. Furthermore, the report classifies the market according to the regions of North America, Europe, APAC, MEA, and Latin America.
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