Market Insight

RESEARCH NOTE - A Cumulative $5 Billion to Be Spent on Outdoor Small Cell Backhaul Equipment Between 2016 and 2020

December 19, 2016

Richard Webb Richard Webb Director – Research and Analysis, Service Provider Technology

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Following is information and insight from IHS Markit about our H2 2016 Outdoor Small Cell Mobile Backhaul Equipment Biannual Market Tracker, which includes data for the half-year ended June 30, 2016.

Highlights

  • The outdoor small cell backhaul market accelerated in 2016, with revenue growing more than 200 percent year-over-year
  • Just over $5 billion will be spent globally on outdoor small cell backhaul equipment from 2016 to 2020
  • By 2020, deployments of outdoor small cell backhaul connections are projected to approach nearly 700,000

Our Analysis

The small cell backhaul market is still in experimentation mode and has been since early trials commenced in 2013. Market growth started to look more meaningful this year—with revenue up 233 percent year-over-year, albeit from a very modest base—but we anticipate the market to really kick into higher gear in 2018.

IHS Markit is forecasting that a cumulative $5.1 billion will be spent worldwide on outdoor small cell backhaul equipment between 2016 and 2020, driven by an increasing number of mostly modest-scale projects to augment 3G and Long Term Evolution (LTE) capacity in urban areas and to provide mobile coverage in rural markets. The compound annual growth rate (CAGR) for the five-year period is 78 percent.

It’s worth noting that the $5.1 billion for outdoor small cells is in addition to the nearly $43 billion that’s being spent on macrocell backhaul equipment during the same five-year period.

Deployments of outdoor small cell backhaul connections are expected to grow to 109,000 in 2016, up from 35,000 in 2015. And by 2020, deployments are projected to reach 693,000—for a total installed base of around 1.9 million.

Wireless microwave makes up nearly 60 percent of small cell backhaul gear revenue today, climbing to over 80 percent in 2020 led by E band millimeter. 

Geographically, small cell deployments generally reflect the regional share of the overall mobile infrastructure market. By 2020, the regional breakdown for small cell backhaul equipment will be: Asia Pacific (48 percent), Europe, the Middle East and Africa (27 percent), the Caribbean and Latin America (14 percent) and North America (11 percent).

Small Cell Report Synopsis

The IHS Markit biannual small cell mobile backhaul equipment report tracks equipment used for transporting traffic from outdoor small cell sites, such as those attached to light poles, utility poles, and the sides and tops of buildings. It provides worldwide and regional market size, forecasts through 2020, analysis and trends for equipment, connections and cell sites by type. The report covers equipment including digital subscriber line (DSL) modems and digital subscriber line access multiplexers (DSLAMs); Ethernet over copper and fiber; <6GHz microwave; point-to-point (P2P) microwave; point-to-multipoint (P2MP) microwave; and licensed and unlicensed millimeter wave.

 

Geography
Global
Research by Market
Mobile & Telecom
Category
Mobile Networks
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