Analysis from Frost & Sullivan of the total global mobile backhaul and wireless core market shows that the market earned revenues of $357.5 million in 2011. It is forecasted that revenue is expected to increase to $954.4 million by 2018, at a compound annual growth rate of 15.1 percent.
New opportunities are being created because of the telecom industry’s shift to Long Term Eevolution (LTE) and 4G technologies. Backhaul is moving to new architectures, such as Internet protocol (IP) and Ethernet, creating growth opportunities for testing, Frost & Sullivan senior research analyst, Mariano Kimbara, told the Backhaul Bulletin. “This migration presents a number of key growth opportunities for test equipment vendors,” he said.
Kimbara also told the Bulletin that developing solutions that will help manage various applications to facilitate the interoperability of mobile backhaul testing is likely to generate high growth and success for mobile backhaul test equipment vendors. “Customers are looking for a one-stop-shop investment to get all test deployments from a single source,” Kimbara said.
Testing companies also are rolling out certification programs to ensure consistency for telecom-network standards. These certifications have homogenous network devices that work together to enable a more scalable implementation of OEM technologies across the networks. The explosion of media-rich and bandwidth-intensive applications is compelling network operators to reevaluate the mobile network infrastructure to improve user experience and reduce costs.
The continuous replacement of time-division multiplexing (TDM) technologies into Ethernet and IP technologies is one of the main factors driving demand for the mobile backhaul test equipment markets, according to Kimbara. He explained that the industry is experiencing a historically high growth in mobile traffic and data that is driving the need for a new set of dynamics and realignment for mobile backhaul. “Within this transition, it is crucial for IP and Carrier Ethernet to stay ahead of higher-bandwidth and quality-intensive service demands, such as data, voice and video services delivered over the network,” Kimbara said.
With the industry moving from 3G to 4G technologies and the increasing backhaul speed moving from TDM to 1G or 10 GB facilities, updates have driven testing growth opportunities because the infrastructure architecture that delivers LTE services has changed. There were approximately 30 commercial deployments of LTE in 2011. It is expected that the first implementations of voice over LTE (VoLTE) will be deployed in 2012, according to Kimbara.
“For at least the next two to three years, the industry is expected to experience a combination of both E1/T1 (for voice) and Ethernet/IP (for data services) technologies in the mobile backhaul market,” Kimbara said. He added that the hybrid-network approach has to support legacy networks and new architectures, representing some key industry challenges as it obliges carriers to sustain two separate networks. New architectures are trying to provide the same level of quality required in TDM networks.
Analysis of the global mobile backhaul and wireless core market is part of the Test & Measurement Growth Partnership Services program, which also includes research in the LTE test equipment market and wireless test equipment market.