Study: Mobile backhaul market will grow 60% in 2009

Mobile backhaul equipment has been a hotsectorin wireless this year and last as operators invest more in high-capacity data technologies, according to a new research report by Infonetics. Backhaul gear investment among carriers grew 59% in 2008 to $3.7 billion globally and will jump an additional 60% in 2009, making it a $5.7 billion industry, the report found.

Most of that increase is being driven by carriers transitioning their TDM backhaul infrastructure to IP-Ethernetand new microwave radios to handle current increased traffic demands future 4G traffic demands, Infonetics analysts said. “Ethernet-only microwave backhaul equipment is beginning to take off, particularly for WiMAX networks, which have no issues regarding voice timing and synchronization. Gigabit Ethernet ‘LTE-ready’ microwave backhaul products were launched this year, and more Ethernet-only microwave products are expected to launch in 2010 as mobile operators move to Ethernet-only products in preparation for HSPA+ and LTE, sparking an acceleration in the Ethernet microwave backhaul segment,” Infonetics WiMax and microwave and devices analystRichard Webb said in the report.

Infonetics did not break out radio backhaul versus wireline investment; nor did it quantify spending by region. But traditionally European operators have relied on wireless links while American operators look to wireline infrastructure. Verizon Wireless (NYSE:VZ, NYSE:VOD) and AT&T (NYSE:T) are both investing heavily in bringing fiber Ethernet to the cellsite. But there is evidence that the predominance of wired backhaul in the US might be ending. Clearwire (NASDAQ:CLWR)is connecting90% of its WiMax sites with high-capacity radio links. According to Clearwire chief technology officer John Saw, the average ClearwireWiMax site requires at least 30 Mb/s of capacity today but will eventually need as much 100 Mb/s. While wireline providers are being much more aggressive in their fiber-to-the-cell deployments, their footprints are nowhere near where they need to be to support Clearwire’s rollout plans, Saw said.

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