We recently published a 5-year forecast on the Mobile Backhaul market. In this research study, we looked at the two layers of mobile backhaul — Transport along with Routing and Switching (R&S).
The conclusion, simply put, was that you can’t deliver LTE without upgrading the mobile backhaul; hence demand for mobile backhaul will have to rise with the roll out of LTE.
There are a number of demand drivers for mobile backhaul. Some of these include 1) building new cell sites, 2) upgrading an existing site for more capacity, and 3) transitioning to a packet-based backhaul network. And naturally, LTE propels each of these demand drivers higher:
- New cell sites: Operators around the world are installing LTE macro cell sites to capture population coverage. Following their build of macro sites, a number of operators intend to enhance the network performance with small cells.
- Capacity upgrade: LTE technology is capable of transmitting 100 Mbps to a single user (the average download speed will be closer to 10 Mbps with multiple users) so long as the backhaul capacity is in place to support this high capacity.
- Packet-based backhaul: To take full advantage of LTE, operators are building packet networks requiring the installation of routers and switches at cell sites and aggregation sites.
Therefore, more LTE simply means: more mobile backhaul.
We are expecting the demand for mobile backhaul to approach $8.5 billion by 2017 of which R&S is expected to comprise nearly a third as mobile backhaul evolves from a TDM to a packet network. The Transport layer will comprise the remaining significant share of the $8.5 billion market, since link capacity will steadily rise through the years as operators increase network performance by adding new macro and small cell sites.