For those who follow the mobile infrastructure business as an indicator of service provider interest in upgrading their networks, finding out what is going on in various sectors is important. This is particularly the case in regards to looking at the mobile backhaul equipment market as it relates to small cells.
The reasons are obvious. Small cells are now seen as foundational for mobile operators to increase their bandwidth in densely populated areas, provide better user experiences, and serve as critical in the competition with OTTs. Hence, just how fast equipment to enable small cell deployments is being purchased and connected, particularly that which backhauls traffic, is of intense interest.
With some insight on this subject, IHS (News - Alert) Technology has just published its, Outdoor Small Cell Mobile Backhaul Equipment Biannual Market Tracker, which contains food for thought as there is good news and a bit of bad.
Let’s start with the bad. Despite all of the enthusiasm expressed over the past few years for small cells as analyst Richard Webb, research director, mobile backhaul and small cells, IHS Technology, notes is his analysis that the outdoor small cell deployments were “off to a slow start” the past six months. The good news is that they are: “Now showing signs that they will grow significantly over the next several years, driven mostly by mobile operators' common need to enhance saturated macrocellular networks and improve the mobile broadband experience by adding capacity through dense low power node deployments.”
The better news not just for vendors of solutions but for all of us as customers is that Webb says the global outdoor small cell backhaul market will reach $2.2 billion in 2020, with a five-year (2016–2020) compound annual growth rate (CAGR) of 80 percent. To say the least that is impressive growth.
As Webb points out, mobile service providers are now in the testing and field trialing stage of evaluating what is a diverse set of outdoor small cell and backhaul alternatives. This is not just an evaluation of equipment but also looking at all of the operational aspects of deployment of small cell networks including connectivity, interoperability, monitoring and maintenance, just to name a few. Further good news is that leading edge operators are beginning to make “modest” deployments. This includes Vodafone (News - Alert) and other operators who are looking to outdoor small cells as a means for expanding rural are using small cells for outdoor coverage in rural areas. The reasoning here makes sense since in rural areas the backhaul challenges of urban areas do not exist and connectivity is typically via the fixed network.
Webb is forecasting the increase in outdoor small cell deployments to begin next year. He says during the forecast period this will result in a cumulative $6.4 billion being spent on outdoor small cell backhaul equipment between 2016 and 2020.
Additional highlights from the analysis include:
- For the full-year 2015, the global outdoor small cell backhaul equipment market totaled $117 million
- Wireless (microwave) solutions account for the bulk of small cell backhaul revenue
- Of the individual technologies, point-to-point (P2P) microwave and Ethernet fiber were the small cell backhaul revenue leaders in 2015
- 42,600 outdoor small cell backhaul connections were deployed in 2015, rising to 878,000 in 2020
For those interested in the granularity of the analysis, it includes: worldwide and regional market size forecasts through 2020, analysis and trends for equipment, connections and cell sites by type. In addition, it tracks: digital subscriber line (DSL) modems and digital subscriber line access multiplexers (DSLAMs); Ethernet over copper and fiber; <6GHz microwave; point-to-point (P2P) microwave; point-to-multipoint (P2MP) microwave; and licensed and unlicensed millimeter wave.
Small cells undeniably are the future of wireless networking for mobile operators and not just for expanding outdoor coverage but indoor coverage as well, and as part of how operators are going to address emerging IoT opportunities.
Edited by Maurice Nagle