“We are building a truly mobile 5G so everyone can benefit from the 5G revolution”. That is what T-Mobile said when it first launched 5G in the 600 MHz spectrum, preparing to become the first operator to advertise and offer 5G nationwide. With 5G now proliferating rapidly across the globe and more operators adopt a multi-band based spectrum strategy including not just mid-band but also high-band and low-band spectrum, the timing is right to review the various 5G options, discuss the benefits with low-band spectrum, and assess the status with sub-1 GHz 5G NR deployments.

5G is not all the same. One of the more compelling aspects of 5G is that there are so many different 5G technologies and flavors to support a confluence of use cases with different performance requirements. And the spectrum will play an important role. At a highly simplified level, there are three broad 5G categories from a spectrum perspective, including low-band – ideal for coverage, high-band – ideal for capacity, and the mid-band – ideal for coverage and capacity.

And from spectrum and transceiver perspective, there are at a high level five different 5G NR networks including  (1) sub-1 GHz NR, (2) upper mid-band Massive MIMO, (3) 2 GHz 8T8R and FDD Massive MIMO, (4) 6 GHz NR, and (5) Millimeter Wave (mmWave).

 

 

Not surprisingly, mid-band 5G NR has dominated the capex mix in this initial 5G wave, propelling cumulative 2018-2020 Massive MIMO NR investments to approach $10 B to $20 B. At the same time, low-band NR activity is firming up, validating the message that operators and suppliers have communicated for some time, namely that all spectrum will eventually become 5G spectrum.

While the spectral efficiency uplift between low-band LTE and NR is rather small (10% to 20%), assuming all else equal, both greenfield and brownfield operators are starting to realize that the low-band will play an important role in the broader 5G strategy to expand coverage, minimize the digital divide, and improve indoor performance.

The inherent propagation characteristics with sub -1 GHz spectrum and the resulting coverage benefits will enable operators to build a base layer that will serve as the foundation to expand the geographic and population coverage nationwide.

Also helping to explain the renewed interest in the sub-1 GHz NR is the role the spectrum can play to minimize the digital divide. COVID- 19 is a call for governments across the world to reexamine their broadband capabilities and increase their respective subsidization efforts to minimize the digital divide with comprehensive broadband solutions designed to handle the peak requirements of today and tomorrow. Although broadband inequities remain significant, a string of indicators suggest governments are working to improve connectivity access – the number of countries with a national broadband plan approached 174 in 2020, up from 102 in 2010 (The State of Broadband 2020).

 

 

Indoor remains a challenge. Preliminary feedback from some of the early mid-band adopters also suggests that the gap between macro and small cells will be much narrower with upper mid-band deployments relative to sub 2 GHz systems, reflecting the propagation characteristic with the higher operating frequencies and technology limitations to address outdoor to indoor losses. Given the incremental volumes required to improve the performance indoors, the low-band spectrum can help to reduce the indoor capex.

China Mobile’s recently announced 700 MHz tender, involving around 480 K 5G NR base stations, will provide a significant boost to the low-band ecosystem. This combined with the benefits discussed above and the fact that there are around 400 operators globally operating LTE or 5G NR networks in the low-band (GSA), forms the basis for the improved low-band market sentiment.

In short, the initial 5G ascent was driven by the upper mid-band and massive MIMO. The time is right to start getting excited about the low-band – sub 1 GHz deployments are expected to comprise a greater share of the 5G capex going forward.

 

Dell’Oro Group published an update to the Broadband Access and Home Networking 5-Year Forecast report in July 2021

Continued Subscriber Growth and Bandwidth Consumption Remain Key Catalysts

Global spending on broadband access equipment and CPE is expected to have a 3% CAGR from 2020-2025, which is a solid increase from a 0% CAGR in our January 2021 5-Year forecast edition. The combination of continued residential subscriber growth and increased capacity utilization rates noted by global broadband providers will more than offset the negative impacts of component shortages and labor limitations.

Broadband subscriber additions continue to grow at a furious pace around the world, as the Delta variant continues to limit the return of employees to their offices and has extended hybrid learning environments for students. Even if subscriber growth does slow later this year, broadband penetration rates and the total addressable market for broadband service providers have expanded significantly over the last year. Subscriber growth has also resulted in improved revenue and gross margins for service providers. As a result, providers are pulling forward some of their upgrade projects, including those involving the transition from copper to fiber.

The spending slump we had expected to see in 2021 after the increased investment levels of 2020 is not going to materialize. In fact, spending will continue to grow this year as operators deal with continued subscribers additions, as well as competitors increasing their investments in fiber, HFC, and fixed wireless networks.

PON Equipment Spending Expected to Remain Solid

Our five-year CAGR for PON equipment has been increased yet again to 5% from 3%. China, which has historically accounted for anywhere from 65-80% of total PON spending, has peaked in terms of total ONT units consumed on an annual basis. The Chinese FTTH market has matured, with broadband penetration in the country reportedly nearing 80%. Though subscriber growth is slowing, there is still a tremendous installed base of subscribers that will continue to require new ONTs.

Although China’s ONT volumes are coming down from the peak years of 2017 and 2018, additional growth is expected from the rest of the world—particularly North America and Western Europe. In North America, the FCC’s $20B RDOF (Rural Digital Opportunity Fund) program will help transition a significant number of rural areas to fiber over the next 5-7 years. In Western Europe, major operators including Orange, DT, BT OpenReach, and Proximus are all expanding their fiber rollouts and even moving quickly to XGS-PON for symmetric 10 G services.

Finally, in Asia, India, Indonesia, and Malaysia, along with a 10 G upgrade cycle in Japan and South Korea should also help sustain the market.

Cable Infrastructure Spending Set for Growth

The glut of DOCSIS channel capacity that helped push down cable equipment revenue in 2018 and 2019 was actually beneficial to operators in 2020 as they were able to address significant increases in both upstream and downstream traffic during the pandemic with minimal increases in spending. In most cases, cable operators used the software tools available as part of DOCSIS 3.1 to ensure adequate bandwidth for all subscribers. In other cases, operators purchased additional DOCSIS licenses as part of accelerated node split programs to address systems with the greatest need.

Regardless, after two years of under-investing in infrastructure, the overall cable infrastructure market will see a steady increase in revenue throughout our forecast period, as mid- and high-split projects in North America and Western Europe, designed to increase upstream capacity, are accelerated. Investments in outside plant equipment, particularly new amplifiers and taps, will also continue as operators begin the multi-year process of preparing their networks for DOCSIS 4.0 and its ability to enable extended-spectrum DOCSIS (ESD), low-latency DOCSIS, and full-duplex DOCSIS (FDD).

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About the Report The Dell’Oro Group Broadband Access and Home Networking 5-Year Forecast Report provides a complete overview of the Broadband Access market with tables covering manufacturers’ revenue, average selling prices, and port/unit shipments for Cable, DSL, and PON equipment. Covered equipment includes Converged Cable Access Platforms (CCAP), Distributed Access Architectures (DAA), DSL Access Multiplexers (DSLAMs), PON Optical Line Terminals (OLTs), Customer Premises Equipment ([CPE] for Cable, DSL, and PON), along with SOHO WLAN Equipment, including Mesh Routers. For more information about the report, please contact dgsales@delloro.com.

Dell’Oro Group published an update to the Microwave Transmission & Mobile Backhaul market 5-Year Forecast report in July 2021.

 

xHaul Systems Equipment in Demand

xHaul, a term referring to fronthaul, midhaul, and backhaul as well as transport and packet processing, is projected to grow through the forecast period, reaching nearly $9 billion by 2025. This multi-year growth is expected to be driven by 5G. In the xHaul forecast, we include both Mobile Transport (fronthaul and backhaul) and Routers & Switches. As would be expected, we believe the highest growth in xHaul will be from growing installations of Routers & Switches as more Layer 2 and 3 functions are required in the mobile network.

The Mobile Transport Layer Returns to Growth

The end of the 4G deployment ramp brought a slowdown in both mobile backhaul and fronthaul transport equipment sales. However, this trend seems to be in reverse as 5G rolls out globally. A small glimpse of this reversal, though restrained by the COVID-19 pandemic, was visible in 2020 when the Mobile Transport equipment market increased slightly. We believe the growth in 2020 was just the beginning, and predict that the Mobile Transport market, consisting of mobile backhaul and fronthaul, will grow for many more years and that the cumulative revenue for the next five years will approach $27 billion, a solid increase over the previous five-year period.

Microwave Transmission Important for 5G Backhaul

While much of the growth will be with fiber backhaul systems, we expect wireless backhaul systems such as Microwave Transmission equipment will be a critical component in an operator’s successful rollout of 5G for two simple reasons: fiber is not everywhere and time to market is critical to success.

Therefore, we anticipate that the demand for Microwave Transmission equipment will increase for a number of years and that much of the growth will be from rising sales of E-band radios. We forecast E-Band radio transceiver shipments to grow at a compounded annual growth rate (CAGR) of nearly 30 percent.

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About the Report The Dell’Oro Group Microwave Transmission & Mobile Backhaul 5-Year Forecast Report offers complete, in-depth coverage with tables covering manufacturers’ revenue, radio transceivers, and average selling prices. The report tracks mobile backhaul by cell type (macro and small cell) and technology (wireless and fiber/copper). The microwave transmission tables forecast point-to-point TDM, Packet and Hybrid Microwave as well as full indoor and full outdoor unit configurations. To purchase this report, please contact us at dgsales@delloro.com

Dell’Oro Group published an update to the Optical Transport 5-Year Forecast report in July 2021.

 

Optical Transport Market Forecasted to Grow Through 2025

The Optical Transport market, largely driven by WDM equipment, is forecasted to increase in size annually for the next five years, reaching nearly $18 billion. This forecast update is unchanged from our previous forecast. That said, we did lower our outlook for WDM Metro since the coherent 400 Gbps ZR (400ZR) pluggable optics are now available and interest in using them in an IPoDWDM architecture seems high.

Coherent ZR Optical Pluggable Emerging

We are predicting coherent ZR optical pluggable demand to reach a material amount in 2022, starting with 400ZR. We project this pluggable optic will be in high demand among Internet content providers (ICPs), driving a very high percentage growth rate for the next few years. Following the success of 400ZR, we anticipate 800ZR will enter the market a few years later. We forecast the ZR pluggable optics market will surpass $500 million in annual sales by 2025.

1+ Tbps to Follow 800 Gbps

Demand for 800 Gbps-capable line cards, first introduced in early 2020, has rapidly increased, demonstrating a strong rate of adoption as well as the markets continued desire for higher performance DWDM transponder cards. As such, we believe the market is already preparing to release the next single carrier wavelength speed.

We predict the next wavelength speed following 800 Gbps will be 1200 Gbps (1.2 Tbps). Based on the timing of past coherent DSP introductions, we anticipate 1.2 Tbps-capable line cards could enter the market before the end of 2023.

We forecast that by 2025 about one-third of all coherent wavelength shipments will be from a line card capable of transmitting a signal at a speed of 800 Gbps or higher.

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About the Report The Dell’Oro Group Optical Transport 5-Year Forecast Report offers a complete overview of the Optical Transport industry with tables covering manufacturers’ revenue, average selling prices, unit shipments, wavelength shipments (by speed up to 1.2 Tbps). The report tracks DWDM long haul, WDM metro, multiservice multiplexers (SONET/SDH), optical switch, optical packet platforms, data center interconnect (metro and long haul), and disaggregated WDM. Click here to learn more about the report or contact us at dgsales@delloro.com.

Dell’Oro Group published an update to the Mobile Core Network 5-Year Forecast report in July 2021

We project the Mobile Core Network (MCN) to have an overall revenue compound annual growth rate (CAGR) of 3% from 2020 to 2025. The report also estimates the 5G portion of the MCN market to have a 33% CAGR. Some key highlights from our recently published Mobile Core Network (MCN) July 2021 5-Year Forecast Report are as follows:

• The cumulative investment is expected to be over $50 B from 2021 to 2025, with regional shares in the range for North America – 18 % to 23 %; Europe, Middle East, and Africa – 30 % to 35 %; Asia Pacific – 40 % to 45 %; and Caribbean and Latin America – 5 % to 10 %.
• By the year 2025, MCN functions associated with 5G are expected to represent over 70 % of the revenue mix between 4G and 5G MCN functions.
• 5G Core builds by the three incumbent service providers for 5G Standalone (5G SA) networks in China are continuing to exceed our expectations. In addition, in 2021, the new Chinese communications service provider, China Broadcasting Network will be beginning construction of its 5G SA network.
• Deployments of more 5G SA networks are expected in the latter half of 2021 in Australia, Germany, Japan, South Korea, Switzerland, and the United Kingdom. AT&T and Verizon should begin in earnest in 2022 and 2023 with their 5G SA networks. Geographic coverage is minimal at launch and is expected to grow throughout the forecast period.

 

About the Report Dell’Oro Group’s Mobile Core Network 5-Year Forecast Report offers a complete overview of the market for Wireless Packet Core, IMS Core, policy, and subscriber management with historical data, where applicable, to the present. The report provides a comprehensive overview of market trends by network function implementation (Non-NFV and NFV), covering revenue, licenses, average selling price, and regional forecasts for various network functions. Click here to learn more about the report or contact us dgsales@delloro.com for the full report.