Infonetics Research: Shift seen in operator strategy for mobile backhaul; equipment spending up 21%

April 23, 2010
Market research firm Infonetics Research released the first edition of its biannual 2010 Mobile Backhaul Equipment and Services market size, market share, and forecast report, along with results from its new IP/Ethernet in Mobile Backhaul Networks: Global Service Provider Survey.

APRIL 22, 2010 -- Market research firm Infonetics Research released the first edition of its biannual 2010 Mobile Backhaul Equipment and Services market size, market share, and forecast report, along with results from its new IP/Ethernet in Mobile Backhaul Networks: Global Service Provider Survey.

"We have seen a wholesale shift in backhaul strategies as operators try to reduce the costs associated with skyrocketing mobile data traffic. Six months ago when we surveyed operators around the world, most were taking a dual/hybrid backhaul approach (TDM plus IP/Ethernet). Just last month when we repeated the survey, most operators told us they plan to use a single IP/Ethernet backhaul, whether over microwave, fiber, or copper. Mobile operators and transport providers now trust IP/Ethernet to do the whole job, including the tricky timing and synchronization required for most of the world's mobile networks. We declared 2009 the Year of IP/Ethernet Backhaul, and we see no slowdown in the mobile backhaul equipment market," explains Michael Howard, principal analyst and co-founder of Infonetics Research.

Richard Webb, directing analyst for microwave at Infonetics Research and a contributor to the mobile backhaul report, adds: "With operators increasingly recognizing Ethernet-based solutions as the best available means of accommodating backhaul traffic growth, and with microwave products now achieving 1Gbps in some scenarios, the Ethernet-only microwave segment is poised for rapid growth over the next few years, out-performing hybrid TDM/Ethernet solutions."

MOBILE BACKHAUL EQUIPMENT MARKET HIGHLIGHTS
Mobile backhaul equipment spending increased 21% in 2009, to $7.2 billion worldwide

Infonetics Research forecasts the mobile backhaul equipment market to grow to $10.4 billion by 2014

Ericsson continues to lead the mobile backhaul microwave radio equipment segment, with 20% worldwide revenue market share in 2009, with several vendors close behind

Tellabs leads the combined Ethernet cell site equipment segment (routers and gateways); major changes in market leadership are expected in the future as the market matures

Microwave mobile backhaul equipment, both TDM-based and Ethernet and dual Ethernet/TDM-based, made up 81% of all mobile backhaul equipment sales in 2009, with the dual and pure Ethernet microwave equipment revenue increasing rapidly

Ethernet cell site router revenue jumped 136% in 2009, nearly doubling its share of worldwide mobile backhaul equipment spending

Infonetics expects almost 1.5 billion new mobile subscribers and about 1.2 billion new mobile broadband subscribers between 2010 and 2014, which will require more base stations, more cell site connections, higher backhaul capacities, and equipment for each cell site connection

Asia Pacific leads in mobile backhaul equipment revenue growth due to more users, led by China and India, and higher bandwidth per user in other countries

Infonetics' mobile backhaul report provides in-depth analysis, select market share, and worldwide and regional market size and forecasts through 2014 for mobile backhaul equipment, connections, installed cell sites, and service charges. Companies tracked include Actelis, ADTRAN, ADVA, Alcatel-Lucent, Alvarion, ANDA, BridgeWave, Cambridge, Celtro, Ceragon, Ciena, Cisco, DragonWave, ECI, Ericsson, Hatteras, Huawei, Juniper, MRV, NEC, Nokia Siemens, Overture, RAD Data, Tellabs, ZTE, and others.

SERVICE PROVIDER SURVEY HIGHLIGHTS
65% of the mobile operators and backhaul transport providers interviewed for the survey have a strategy in place to move to single all-IP/Ethernet backhaul

35% of the operators have deployed microcells and/or picocells, although many do not yet have a strategy or plans for using them

For the IP/Ethernet in mobile backhaul networks survey, published in March 2010, Infonetics interviewed 18 mobile operators and backhaul transport providers that represent 39% of worldwide telecom revenue and 42% of capex. The respondent providers operate in North America, Europe, and Asia Pacific and are a mix of incumbent, competitive, and wireless operators. Infonetics interviewed the operators about the drivers, barriers, strategies, and technologies used for deploying IP/Ethernet mobile backhaul.

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