ABI Research shows that capital expenditures on microwave backhaul equipment for mobile networks will grow at a compound rate of 4.3 percent. It will reach almost $5 billion in 2012 as mobile network operators upgrade and transition to more cost-effective packet microwave systems. With a combined share of 61 percent in 2017, the Asia Pacific and Western European regions will continue to dominate the market for microwave equipment.
World-wide opex from leased T1/E1 and fiber backhaul represents $6.2 billion in 2012, growing at a CAGR of 2.2 percent. “We believe mobile network operators are increasingly lowering their TCO by using capex to replace leased T1/E1 and fiber backhaul with modern, high-capacity, cost-effective, packet-based microwave links,” said Nick Marshall, principal analyst at ABI Research.
Marshall told Backhaul Bulletin that with data growing exponentially as mobile networks transition from 3G to LTE, the costs involved with fiber installation can become expensive in relation to distance. “Microwave is not a function of distance,” he said.
He continued to tell the Bulletin that in order for networks to handle more traffic and more subscribers, they are evolving to more distributed, feature-rich small cell architectures, especially in dense urban areas.
Backhaul opex on leased copper-based T1/E1 lines will continue to shrink at a CAGR of −1.1 percent reaching only $4 billion in 2017. “T1/E1-based backhaul is no longer compatible with modern 3G/4G mobile networks and will phase out as operators increasingly transition away from legacy TDM systems,” continued Marshall, in a company release.
ABI Research has focused on the last-mile and the access layer of backhaul in its newly published backhaul forecast database that provides backhaul forecasts for T1/E1, Ethernet over copper and fiber, cable, microwave and WiMAX. The research includes global and regional forecasts on data consumption, backhaul opex, capex for microwave, revenue for leased backhaul access technologies, cumulative macro base station shipments, as well as wireless traffic and bandwidth demands broken out to provide a comprehensive look at the access technologies pertaining to backhaul, as well as data traffic expected.