NSR’s Wireless Backhaul via Satellite, 7th Edition report finds that the impending launch of O3b and global HTS program deployments are leading the industry to long-term change with a potential for industry revenue to hit $2.9 billion by 2022. This shows growth of more than three-fold from today’s $830+ million revenue base.
The launch of O3b will have an immediate and substantial effect on the industry. Rural and underserved areas have dealt with the limited options of 2G or 2.5G services for basic voice, SMS and Internet access services for years. Low mobile penetration levels go along with the delayed technological growth. “With O3b, rural markets will now enjoy 3G and eventually 4G services that curb the widening Digital Divide,” according to report author and NSR senior analyst, Jose Del Rosario.
New HTS programs are on the horizon, specifically Intelsat’s EPIC and Inmarsat’s GlobalXpress. Both have either global or region-specific footprints to support fixed land-based towers and mobility platforms on land, air and sea. Del Rosario noted that innovation, risk-taking and competition will transform not only the industry’s financial prospects, but improve the quality of life for millions of individuals and communities.
The report outlines the industry’s future landscape in terms of the market’s evolution from current solutions to next-generation programs, as well as opportunities presented by the market shift. WBS7 provides an expert view into the turning point in a complex market that could leave the unprepared out of the running.
One of the key factors contributing to the global mobile backhaul equipment market growth is the worldwide boom in mobile data traffic, according to Research and Markets’ “Global Mobile Backhaul Equipment Market 2010-2014.” The mobile backhaul equipment market has also witnessed the demand for microwave-based equipment, mainly for backhaul solutions. However, rapid technological change has led end-users to delay equipment purchases, which could pose a challenge to the growth of this market. Key vendors that are dominating this market space include Alcatel-Lucent, Huawei Technologies, Ericsson and Nokia Siemens Network.
The report highlights that mobile data traffic has grown 280 percent annually over the past few years, and is expected to double in the near future. This surging demand for mobile services threatens to cause network congestion and diminished service quality, which increases the chances of customers switching to competitors; therefore, mobile bandwidth has become a precious commodity. To effectively monetize bandwidth, providers need to be able to measure, monitor and manage network equipment quality, thereby driving demand for mobile backhaul equipment.
The demand for microwave-based equipment, mainly for backhaul solutions, is on the rise and this trend will continue. Microwave-based wireless backhaul has been recognized as the most cost-effective solution for delivering higher capacity in the cellular world, so for the emerging bandwidth-hungry LTE market, the benefits of microwave-based backhaul solutions are even higher.
Dell’Oro Group has published a report showing that public-access small-cell equipment comprising service-provider Wi-Fi (SP Wi-Fi), and evolved WCDMA/LTE and multimode WCDMA/LTE/Wi-Fi small-cell radios, will drive future growth in the market.
According to Stefan Pongratz, senior analyst with Dell’Oro Group, the report finds that the small-cell markets, including the public-access market (residential and enterprise), will generate the most rapid growth in the next five years. “Even though significant challenges remain for operators to move to large-scale small-cell deployments in the licensed spectrum, there are clear indicators that a number of early adopters are looking to shift some CAPEX from outdoor population coverage to indoor coverage and cell edge performance,” Pongratz stated in a company release.
The report includes an assessment of the backhaul vendor landscape, vendor solutions and the various backhaul technologies that will be used at different small-cell sites. More than 60 percent of small-cell sites that use external backhaul will rely on line-of-sight (LOS) and non-line-of-sight (NLOS) microwave by 2017. Analysis of unlicensed small cells also shows that SP Wi-Fi will account for approximately 85 percent of all small- cell radio shipments in 2017.
A five-year unit and revenue forecast of the following segments also appears in the report: radio access network (WCDMA/LTE – traditional and evolved), backhaul (LOS/NLOS microwave and fiber/copper), and SP Wi-Fi (enterprise-class devices and outdoor mesh nodes that ship to service providers).
Infonetics Research has released excerpts from its second quarter 2012 Microwave Equipment vendor market share and forecast that provide worldwide and regional market size, vendor market share, forecasts and analysis for Ethernet, TDM and hybrid microwave equipment by spectrum, capacity, form factor and architecture. Alcatel-Lucent, Aviat Networks, Ceragon, DragonWave, ECI Telecom, Ericsson, Exalt, Huawei, NEC, Nokia Siemens Networks and ZTE were some of the companies tracked.
According to Richard Webb, directing analyst for microwave and Infonetics, the microwave equipment market rebounded in the second quarter due to strong performances from Ericsson and Huawei. Ericsson has regained the top position, moving slightly past Huawei in the second quarter, while NEC moved to the third position.
“Despite choppy performance in recent quarters, we expect the microwave equipment market to grow to $6 billion by 2016, driven by a continuing demand for increased mobile backhaul capacity and the proliferation of small cells,” Webb said in a company statement.
According to the study, the global microwave equipment market totaled $1.2 billion in the second quarter, up 16 percent from the previous quarter and down 6 percent from the year-ago second quarter.
The Dell’Oro Group has updated its mobile backhaul five-year forecast report, which includes the networking and telecom industries, mobile backhaul (including transport and routers and switches) to reach $9 billion by 2016.
The transport portion of backhaul is expected to grow at a 2 percent compounded annual growth rate to $6 billion by 2016. Microwave will be used to backhaul over half of the sites. The router and switches in backhaul should grow at a 9 percent compounded annual growth rate to nearly $3 billion, and is expected to represent 30 percent of the mobile backhaul market by 2016. Following the rollout of macro cell sites for coverage, operators will deploy micro and pico cells or small cells for capacity in metro locations. The requirements for small cell backhaul are expected to favor non-line-of-site solutions.
“Demand for mobile backhaul is growing at a healthy pace as operators deploy additional cellular sites and upgrade to an all IP network,” said Jimmy Yu, vice president of mobile backhaul market research at Dell’Oro Group, in a company release. “Since mobile radios are carrying more packet data than voice circuits and an even greater amount in the future, we anticipate operators will continue to evolve their backhaul networks to increase throughput and efficiency with routers and switches at cell sites and network edge,” added Yu.