Infonetics: Mobile backhaul equipment market to reach $8.2B in 2010

OCTOBER 31, 2007 -- Mobile operators and backhaul transport providers are expected to spend $8.2 billion on mobile first-mile backhaul equipment in 2010, with Ethernet copper and fiber equipment growing the fastest, says Infonetics Research (search for Infonetics) in its latest "Mobile Backhaul Equipment, Installed Base, and Services" report.

According to the report, the top three drivers behind the rapidly increasing numbers of mobile backhaul base stations, cell sites, base stations per cell site, and required bandwidth include:

• A fast-growing number of worldwide mobile subscribers, which is jumping from 2.6 billion in 2006 to 4.2 billion in 2010.
  
• Heavy competition, which is forcing operators to upgrade their equipment and network capacity to improve and add new subscriber services.
  
• An explosion in mobile data and video use, which requires providers to significantly increase the bandwidth they offer, from kilobits per second to a few megabits per second to tens of megabits per second.
  

"2008 will be the year of adoption for IP/Ethernet backhaul, and 2009 will kick off the Ethernet mobile backhaul revolution," said Michael Howard, principal analyst of Infonetics Research and lead analyst on the report. "Ethernet made up just 1% of total mobile backhaul equipment revenue in 2006, but will grow to 21% of the market by 2010. The Swisscom Mobile contract that Tellabs won recently for IP, Ethernet, and pseudowire cell site backhaul is the first of many we'll see over the next 18 months."

More highlights from the report include:

• IP first-mile mobile backhaul equipment sales are forecasted to increase at a 210% 5-year compound annual growth rate (CAGR) between 2006 and 2010.
  
• The number of mobile first-mile backhaul connections is expected to double between 2005 and 2010.
  
• The use of Ethernet over copper, fiber, and microwave for installed and new mobile backhaul connections will accelerate in 2010 -- very dramatically for new connections -- while PDH wireline and PDH/SDH microwave connections sharply decrease.
  
• By 2010, service providers using PDH and ATM over PDH for their first-mile mobile backhaul connections will be paying more than 5X as much in service charges per connection as those using new wireline services (Ethernet copper and fiber, DSL, cable, PON).
  
• Many operators in Europe, and to a lesser extent in North America and Asia Pacific, are planning to use Ethernet packet backhaul over DSL due to DSL's cheaper prices, wider availability, and reliance on copper-fed cell sites.
  
• EMEA -- with Europe, Middle East, and Africa all contributing -- accounts for 42% of worldwide mobile first-mile backhaul equipment revenue in 2007, Asia Pacific for 37%, CALA 14%, and North America 6%.
  

Infonetics' mobile backhaul report tracks the competitive landscape, trends, and growth areas of the mobile backhaul market, from the cell site BTS/NodeB to the BSC/RNC. The report provides worldwide and regional market size and forecasts for mobile backhaul equipment, connections, and service charges for PDH, ATM, Ethernet copper and fiber, SONET/SDH, DSL, PON, coax cable, microwave, WiMAX, and satellite. The report also includes top player analysis, fundamental drivers of the market, changes affecting market growth, etc.

Download report highlights here.