Market research firm Infonetics Research recently released its Mobile Backhaul Equipment and Services market share and forecast report, finding that as operators refresh their 2G networks and transition to 3G, they almost universally adopt IP/Ethernet as the mobile backhaul solution to lower the costs of growing mobile data traffic, using IP as the base technology for 3G, LTE, and WiMAX networks.

The momentum is growing: 89 percent of the money spent on mobile backhaul equipment in 2010 was for IP/Ethernet gear, with the fastest growth happening in Ethernet cell site routers and gateways and Ethernet packet microwave equipment," said Michael Howard, principal analyst and co-founder of Infonetics Research, in a statement.

Richard Webb, directing analyst for microwave at Infonetics and contributor to the forecast report, added: "The radio access network is changing; there is a perceivable transition to IP-centric base stations, co-located 2G, 3G, and 4G base stations, and smaller, more densely deployed base stations. The microwave vendors are responding by broadening their portfolios with products tailored to this new environment, ensuring that microwave stays flexible, cost-effective, and credible as a backhaul solution."

Mobile backhaul equipment market highlights include:

  • The mobile backhaul equipment market grew 10.3 percent in 2010 over the previous year, to $6.84 billion worldwide.
  • Over the long term, demand for Ethernet microwave equipment will remain healthy, driven by demand for Ethernet-based radios for macro and smaller cell base transceiver stations; however, unit pricing will gradually erode, particularly for hybrid TDM/Ethernet gear, inhibiting revenue growth.
  • The addition of almost 1.5 billion mobile subscribers and 1.6 billion mobile broadband subscribers between 2011 and 2015 will require more base stations, more cell site connections, higher backhaul capacities, and equipment for each cell site connection.
  • Ericsson increased its lead in mobile backhaul microwave radio equipment revenue share, posting its best quarter in at least 2 years
  • As of the second half of 2010, Alcatel-Lucent, Tellabs, Cisco, and Huawei together own over 3/4 of the fast-growing Ethernet cell site routers and gateways segment.

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