Recent industry reports highlighted that leading telecom operators have made significant investment in the mobile backhaul equipment in the next couple of years.
TelecomLead.com research has identified some of the growth drivers that will help in the innovation of the mobile backhaul equipment market.
Mobile operators are selecting vendors in the mobile backhaul equipment industry to handle their data traffic.
The latest edition of Ericsson Mobility Report said global mobile data traffic – excluding traffic generated by Fixed Wireless Access (FWA) – is expected to reach 313 EB per month in 2029. Mobile network traffic, when FWA is included, will reach 466 EB per month by the end of the forecast period.
Most of the telecom operators are making investment in 5G network to boost their ARPU. According to Analysys Mason report, telecom operators cannot rely on price rises to boost revenue in 2024 but digital services could help.
5G’s share of mobile data traffic is forecast to grow to around 75 percent in 2029 from 25 percent at the end of 2023 and 17 percent at the end of 2022. This means 5G investment will drive additional Capex for mobile backhaul equipment.
Telecoms have already started benefitting from 5G. Recently, Indian telecom operators such as Bharti Airtel and Reliance Jio could hike mobile service charges.
5G subscriptions in India reached around 119 million by the end of 2023. 5G subscriptions are expected to reach around 840 million by the end of 2029, accounting for 65 percent of mobile subscriptions in the region.
Report from GSMA Intelligence said 5G will add almost $130 billion to the Asia Pacific economy in 2030, with the manufacturing industry forecast to benefit the most, driven by new 5G-enabed applications including smart factories, smart-grids, and IoT-enabled products.
Commercial 5G standalone (SA) networks are present in seven APAC countries (Australia, India, Japan, the Philippines, Singapore, South Korea, and Thailand).
Mobile internet users in APAC will grow from 1.4 billion (51 percent penetration rate) to 1.8 billion (61 percent penetration rate) in 2030. Mobile data traffic in Asia Pacific will quadruple between 2023 and 2030 driven by an increase in data intensive content and growth in 5G adoption.
“The 5G investments mobile operators and governments are making puts many of Asia Pacific’s nations in a leading position to secure strong economic growth,” Julian Gorman, Head of Asia Pacific at the GSMA, said.
Mobile backhaul equipment
Future Market Insights said the market for mobile backhaul equipment is expected to reach $108.56 billion by 2032 from $34.83 billion in 2022, with a CAGR of 12 percent from 2022 to 2032.
Dell’Oro Group said the cumulative amount of mobile backhaul transport equipment that will be deployed from 2024 through 2028 is projected to be $24.5 billion over the next five years.
Some of the leading vendors in the mobile backhaul equipment are: Fujitsu, NEC Corporation, Ericsson, Huawei Technologies, and Cisco Systems, among others.
Jimmy Yu, Vice President of Dell’Oro Group, has lowered the near-term forecast on the mobile backhaul transport equipment market by 6 percent since 5G rollouts have slowed at some operators while others are delaying deployments.
Demand for mobile backhaul equipment, consisting of both wireless and fiber systems, to be used in 5G networks is forecast to grow at a five-year compounded annual growth rate (CAGR) of 13 percent.
Use of Wireless Systems for backhaul is projected to grow at a higher rate than Fiber Systems in the next five years since more mobile radio deployments are expected to occur in countries that mostly use point-to-point microwave transmission systems for mobile backhaul.
Baburajan Kizhakedath
