The global macrocell mobile backhaul equipment market is almost flat in 2016 compared to 2015, but as 5G takes hold, IHS Markit has slightly adjusted upward its extended mobile backhaul forecast to reflect increased demand.
“We are now projecting global mobile backhaul equipment revenue to total $8.76 billion in 2020,” wrote Richard Webb, research director, mobile backhaul and small cells at IHS Markit, in a research note. “This is a 3 percent increase from our April 2016 forecast.”
Webb predicts IP edge routers shipping to the mobile backhaul market will gain traction as operators prepare their networks for 5G expansion with backhaul capacity upgrades.
With backhaul solutions, “fiber has been nibbling away at microwave’s share of revenue for a few years now—and the slow shift to a fiber-biased market is evident through our forecast period (2015–2020),” Webb said.
Still, microwave radio remains a significant part of the macrocell backhaul picture, and early investigations into LTE-Advanced Pro and early 5G deployments suggest the continued demand for ever-increasing backhaul bandwidth will result in a boost for microwave – especially millimeter wave – that will contribute to revenue growth through the mid-to-long term.
“The small cell backhaul opportunity plays a part in this, as we expect many small cells to be aggregated to a macrocell site, driving increased macro backhaul capacity,” Webb wrote.
That jibes with a white paper that Ericsson recently published depicting microwave as a key component in millimeter wave backhaul. IHS identified the revenue market share leaders in mobile backhaul gear in the first half of 2016 as Huawei, Ericsson, NEC, Nokia and Ceragon.
In its report, Ericsson said the performance of microwave backhaul has evolved continuously with new and enhanced technologies and features that make even better use of available spectrum. In fact, microwave will connect 65 percent of all radio sites by 2021.
“Today it already supports 10 Gbps capacities and very low latencies, and is very well prepared to support the future evolution of LTE and of 5G,” the white paper states.
In 2021, high capacity radio sites typically will require backhaul in the 1 Gbps range, and going into 2025, in the 5 Gbps range. But when it comes to using fiber instead of microwave solutions as last mile access in mobile broadband solutions, there will be no dramatic changes in the coming five years, according to Ericsson’s white paper.
Earlier this year, Sprint CTO John Saw said that the company was looking at ways to reduce backhaul costs by using its 2.5 GHz spectrum assets to provide wireless backhaul for small cells instead of fiber. Saw also said the company, which runs one of the largest microwave networks in the U.S. based on the network it acquired from Clearwire, would use dark fiber for backhaul, which may not be cheaper than traditional fiber but would allow the operator more control over the speed and capacity of the backhaul circuit.