ABI: OFDM non-line of sight to dominate small cell backhaul in 2017

Deployments of LTE small cells are prompting across-the-board growth in backhaul technologies, with microwave backhaul equipment in particular expected to generate a compound average growth rate of 35 percent between 2012 and 2017, according to ABI Research.

The market for small cell microwave backhaul equipment will reach more than $6.4 billion in 2017, up from $1.5 billion in 2012, said ABI.

Millimeter wave line-of-sight (LOS) equipment is expected generate revenues of $2.8 billion with 23 percent of microwave links in 2017, while OFDM multiplexing non-line-of-sight NLOS equipment will fetch revenue of $1.9 billion with 48 percent of links. "Thanks to its NLOS properties and Point-to-Multipoint (PMP) hub-and-spoke architecture OFDM NLOS becomes the most popular backhaul technology for small cells in 2017," said Nick Marshall, ABI principal analyst.

In addition, Wi-Fi equipment is forecast to capture $784 million in revenue with 12 percent of small cell backhaul links.

LoS millimeter-wave bands from 60GHz to 80GHz are gaining in popularity and equipment sales for those bands will outpace traditional LoS microwave, 6-38GHz, equipment for small cell applications. ABI projects LoS microwave gear will only represent 13 percent of revenue 13 percent of revenue and 10 percent of small cell links in 2017.

Despite the growing use of wireless backhaul technologies, ABI expects fiber backhaul will also play a vital role in small cell environments. Fiber backhaul solutions for small cells are forecast to total 24 percent of market revenue in 2017, up from 7 percent in 2012, thanks, in large part to demand from China and North America, where operators often favor fiber as a backhaul solution.

Yet the preference for fiber may be outweighed by proximity and cost issues in many cases. Connecting a small cell on a lamppost to the fiber along the street can be too expensive to justify and the lease costs too high, according to independent industry analyst Monica Paolini, who is also a FierceBroadbandWireless contributor. She has suggested that connecting a local network of small cells to a macro cell or other aggregation point with a fiber connection is usually a more cost-effective solution, at least in the short term.

Michael Howard, co-founder and principal analyst at Infonetics, said in a previous interview with FierceWireless that large U.S. operators expect to mostly use wireless technologies for their small cell backhaul. "The operators we have spoken with said that about 80 percent of their small cells will be connected using three types of wireless backhaul--microwave, millimeter wave and licensed non-line of sight," Howard said.

For more:
- see this ABI release

Related articles:
Startup Fastback peddles 'Any Line of Sight' small cell backhaul
Wireless the likely winner in small cell backhaul
Paolini: Can wireless backhaul facilitate transition to fiber backhaul?
Maravedis: PtP will evolve into an $11B market by 2016
Report: Microwave backhaul issues could significantly delay small cell deployment

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