Outdoor small cell backhaul; a $5-billion opportunity

CALIFORNIA, USA: The number of outdoor small cell backhaul connections is forecast by Infonetics to grow more than 100-fold from 2012 to 2016. Infoentics Research finds that a cumulative $5 billion will be spent worldwide on outdoor small cell backhaul equipment between 2012 and 2016.

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

"There's been wild speculation on the small cell opportunity -- 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," says Michael Howard, Infonetics Research's co-founder and principal analyst for carrier networks.

As a result, 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

"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," Howard continues, "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."

Wireless microwave equipment, including various types of microwave and millimeter wave, accounts for 89 per cent of all outdoor small cell backhaul equipment revenue in 2012, while copper, fiber, and DSL wireline products account for 11 per cent.

Richard Webb, directing analyst for microwave, mobile offload and mobile broadband devices at Infonetics and co-author of the report adds, "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, or NLOS, 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."