Report sees 5-year, $5 billion opportunity in outdoor small cell backhaul

“There’s been wild speculation on the small cell opportunity," says Michael Howard of Infonetics Research.

Dec 13th, 2012

Infonetics Research has released excerpts from its new report, the Outdoor Small Cell Mobile Backhaul Equipment Market Outlook. “There’s been wild speculation on the small cell opportunity," notes Michael Howard, Infonetics Research’s co-founder and principal analyst for carrier networks. "Some that lump together small cells with residential femtocells, WiFi hotspots, and in-building and outdoor. Our latest research focuses on just the new, faster-growing outdoor small cell backhaul equipment market."

The study reveals that there is no "silver bullet backhaul solution" for all small cell deployment scenarios, as each depends on multiple variables, including location, form factor limitations, local regulations, available power and network, and cost. As a result, the research finds that mobile operators and backhaul transport providers need a diverse tool kit of solutions for small cell backhaul. Infonetics expects all the outdoor small cell backhaul technologies it tracks to grow at high double- to triple-digit percentage CAGRs through at least 2016.

The new report forecasts the fastest growing segment of the small cell backhaul market -- outdoor small cell backhaul -- in 8 discrete categories: the 3 forms of wireline, i.e. copper, fiber, DSL; and the 5 forms of wireless, i.e. licensed and unlicensed millimeter wave and point-to-point, point-to-multi-point, and non-line-of-sight (NLOS) microwave. The report tracks and forecasts outdoor small cell backhaul equipment revenue, units, connections/links and small cell sites by medium (copper, fiber, air).

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Richard Webb, directing analyst for microwave, mobile offload and mobile broadband devices at Infonetics and co-author of the report, explains, “We expect to see significant shifts in the type of equipment vendors use to backhaul outdoor small cells, with millimeter wave and non-line-of-sight equipment becoming the top segments of the market by 2016. Millimeter wave equipment has a high capacity -- 1 Gbps in a single channel -- and very low latency, and nearly all of the operators we’ve interviewed are evaluating millimeter wave for small cell backhaul.”

The number of outdoor small cell backhaul connections is forecast by Infonetics to grow more than 100-fold from 2012 to 2016. Wireless microwave equipment, including various types of microwave and millimeter wave, accounts for 89% of all outdoor small cell backhaul equipment revenue in 2012, while copper, fiber, and DSL wireline products account for 11%. Additionally, Infonetics reported in a related report that macrocell mobile backhaul spending will grow to $9.7 billion in 2016.

Infonetics' Howard concludes, “After fielding several small cell operator surveys and working directly with chipset manufacturers, mobile operators, small cell vendors, and backhaul equipment vendors for more than 2 years, we are now able to reliably calculate the size of the market and build realistic forecasts. We expect a cumulative $5 billion to be spent worldwide on outdoor small cell backhaul equipment between 2012 and 2016, with the market kicking into high gear in 2014. This is in addition to the nearly $44 billion being spent on macrocell backhaul equipment during the same 5-year period.”

The new report tracks equipment made by companies including Actelis, Adtran, Alcatel-Lucent, Aviat, BlinQ Networks, BluWan, BridgeWave, Calix, Cambridge Broadband, Celtro, Ceragon, Ciena, Cisco, E-Band, ECI Telecom, Ericsson, Fastback, Fujitsu, Huawei, Juniper, MRV, NEC, Nokia Siemens Networks, Overture, Positron-Aktino, RAD Data, Radwin, Samsung, Siklu, Sub10 Systems, Taqua, Tarana, ZTE and many others. More information on the report can be found here.

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