Outdoor Small-cell Backhaul Is Multibillion-dollar Opportunity

December 17, 2012

Infonetics Research has released excerpts from its “Outdoor Small Cell Mobile Backhaul Equipment Market Outlook,” which forecasts the fastest-growing segment of the small-cell backhaul market–outdoor small-cell backhaul–in eight discrete categories: the three forms of wireline (copper, fiber, DSL) and the five forms of wireless (licensed and unlicensed millimeter-wave and point-to-point, point-to-multipoint and non-line-of-sight, or NLOS, microwave). The report tracks and forecasts outdoor small-cell backhaul equipment revenue, units, connections (links) and small cell sites by medium (copper, fiber, air).

According to Michael Howard, Infonetics Research co-founder and principal analyst for carrier networks, in a company release, there has been speculation on the small-cell opportunity, with some that lump small cells with residential femtocells, Wi-Fi hotspots, and in-building wireless and outdoor distributed antenna systems. The latest research focuses on the new, faster-growing outdoor small-cell backhaul equipment market.

“After fielding several small-cell operator surveys and working directly with chipset manufacturers, mobile operators, small-cell vendors, and backhaul equipment vendors for more than two years,” Howard said in the company release, “we are now able to reliably calculate the size of the market and build realistic forecasts. We expect a cumulative $5 billion to be spent worldwide on outdoor small-cell backhaul equipment between 2012 and 2016, with the market kicking into high gear in 2014. This is in addition to the nearly $44 billion being spent on macrocell backhaul equipment during the same 5-year period.”

Richard Webb, directing analyst for microwave, mobile offload and mobile broadband devices at Infonetics, and co-author of the report, stated in the press release, “We expect to see significant shifts in the type of equipment vendors use to backhaul outdoor small cells, with millimeter-wave and non-line-of-sight, or NLOS, equipment becoming the top segments of the market by 2016. Millimeter-wave equipment has a high capacity (1 Gbps in a single channel) and very low latency, and nearly all the operators we’ve interviewed are evaluating millimeter-wave for small-cell backhaul.”

Report highlights indicate that there is no silver bullet backhaul solution for all small-cell deployment scenarios, because each depends on multiple variables, including location, form-factor limitations, local regulations, available power and network, and cost. Mobile operators and backhaul transport providers need a diverse tool kit of solutions for small-cell backhaul. Infonetics expects all the outdoor small-cell backhaul technologies it tracks to grow at high double- to triple-digit percentage CAGRs through at least 2016.

Another highlight shows that the number of outdoor small-cell backhaul connections is forecast to grow more than 100-fold from 2012 to 2016. Also, wireless microwave equipment, including various types of microwave and millimeter-wave, accounts for 89 percent of all outdoor small-cell backhaul equipment revenue in 2012, while copper, fiber and DSL wireline products account for 11 percent.