Worldwide macrocell mobile backhaul equipment demand remains solid from Long Term Evolution (LTE) deployments, outlying 3G network expansion and backhaul enhancements for existing connections. However, increasing pressure on equipment pricing continues to inhibit revenue growth.
Long-term growth in the market will be driven by 5G upgrades and LTE-Advanced (LTE-A) expansion. Therefore, IHS Markit has slightly adjusted upward its extended mobile backhaul forecast. We are now projecting global mobile backhaul equipment revenue to total $8.76 billion in 2020. This is a 3% increase from our earlier forecast, to reflect increased demand as 5G takes root. IP edge routers shipping to the mobile backhaul market will gain traction as operators prepare their networks for 5G expansion with backhaul capacity upgrades.
Looking at backhaul technologies, fiber has been nibbling away at microwave’s share of revenue for a few years now — and the slow shift to a fiber-biased market is evident through our forecast period (2015–2020).
Still, microwave radio remains a significant part of the macrocell backhaul picture, and our early investigations into LTE-Advanced Pro and early 5G deployments suggest the continued demand for ever-increasing backhaul bandwidth will result in a boost for microwave — especially millimeter wave — that will contribute to revenue growth through the mid-to-long term. The small cell backhaul opportunity plays a part in this, as we expect many small cells to be aggregated to a macrocell site, driving increased macro backhaul capacity.
The biannual IHS Markit mobile backhaul equipment report tracks equipment used to transport mobile traffic. The report provides worldwide and regional market share, market size, forecasts through 2020, analysis and trends for macrocell mobile backhaul equipment, connections and installed cell sites by technology. For more information, see https://technology.ihs.com/573169?utm_campaign=PR_-137&utm_medium=press_release&utm_source=BusinessWire or email AmericasLeads@ihsmarkit.com.