Wireless and Mobile Backhaul Equipment Market Assessment, By Component [Hardware, Services], By Network Connectivity [5G, 4G, Others], By Reach [Short-haul Solutions, Long-haul Solutions], By Frequency Bands [Millimeter Waves, Multiband Architecture, Othe

Wireless and Mobile Backhaul Equipment Market Assessment, By Component [Hardware, Services], By Network Connectivity [5G, 4G, Others], By Reach [Short-haul Solutions, Long-haul Solutions], By Frequency Bands [Millimeter Waves, Multiband Architecture, Others], By Architecture [Point-to-point, Point-to-multipoint], By End-users [IT and Telecommunication, BFSI, Healthcare, Aviation, Defense and Military, Logistics and Transportation, Others], By Region, Opportunities, and Forecast, 2017-2031F

Global wireless and mobile backhaul equipment market size was valued at USD 33.2 billion in 2023 and is forecasted to reach a value of USD 78.18 billion by 2031, displaying a CAGR of 11.3% from 2024 to 2031. Demand from data-intensive applications—video streaming and IoT devices will continue to drive the wireless and mobile backhaul equipment market in taking advantage of advances in technology. These include network function virtualization and software-defined networking, improving backhaul networks' flexibility and scalability.

Mobile carriers are increasingly challenged by the need to deploy a HetNet system using both macro and small cells based on 3G, 4G, and 5G technologies. Microwave and millimeter bands, including V-band (60 GHz) and E-band (70/80 GHz), are particularly beneficial for HetNet backhauling. The configuration enables traffic aggregation from multiple base stations at outdoor cell sites, followed by backhauling to the mobile switching centers and the core network.

The MBH network provides connections between RAN air interfaces at small and macro cell sites and the wireless networks connected to remote data centers providing content and applications. Considered one of the core elements of global network architecture, RAN is becoming more critical for MNOs and wholesale operators and thus it is one of the important factors for short to long-term business strategies.

Global wireless and mobile backhaul equipment market trends show that the bandwidth of MBH will soon exceed the traditional 1 Gb/s to macro towers. It is due to the increased demands in the mobile markets, such as the number of users, bandwidth per user, increased duration of viewing contents, and a shift towards a trend of higher resolution videos. Although it presents a great business opportunity, significant technological challenges are associated with different architectures, topologies, technologies, and equipment. According to Ericsson, barring countries that are fiber-dense, such as China, South Korea, and Japan, are estimated with 62% of backhaul connections, which will make use of microwave technology by 2025.

Proliferation of Smartphones and Connected Devices Drive the Market Growth

The growth in the global wireless and mobile backhaul equipment market is driven by the smartphone and connected devices' high adoption rate. Growing demand for seamless connectivity, spurred by connected devices, requires efficient backhaul infrastructure. Smartphones and connected devices propel tremendous data traffic at network operators, which are forced to invest in upmarket backhaul solutions. Globally, mobile data traffic per smartphone is driven by three forces including improvement in device capability, more data-heavy content, and increased data consumption as network performance improves. There are key differences, such as in Sub-Saharan Africa, with an estimated 4.6 GB of mobile data usage per smartphone monthly, compared with GCC countries at 25 GB. The monthly average consumption for every smartphone globally is estimated to be 19 GB and looks forward to increasing to 46 GB in the next five years.

According to the findings by Ericsson, average monthly data traffic per smartphone will rise from 25 GB last year to about 54 GB in five years, reflecting a strong 14% CAGR. In India, the total mobile data traffic will increase manifold at a 19% CAGR, from 18 exabytes/EB per month during the previous year to 53 exabytes/EB per month in five years. This is due to a sharp rise in smartphone users and an increase in the overall use of average smartphones. The most significant growth will occur in Southeast Asia and Oceania, where mobile data traffic per smartphone will grow to around 54 GB/month in 2028, reflecting an impressive 28% CAGR and making it the fastest rate of growth.

A major driver of the mobile backhaul market is the increase in the usage of connected devices, brought by massive IoT adoption. Predicted rapid growth in mobile data traffic, as indicated by Ericsson data showing 26.76 GB per device in North America, 11.01 GB in Middle East and Africa, and an estimated 51.31 GB in Western Europe in four years is expected to drive the market trend.

Increasing Adoption of 5G Network Connectivity Facilitating Market Demand

The increasing coverage of 5G network connectivity is a prime factor in the growth of the wireless and mobile backhaul equipment market. As 5G technology gains more ground, the need for strong backhaul infrastructure, to support the high speed of data and low latency, increases. Deploying small cells and macro cells for 5G networks entails the use of efficient backhaul to ensure continuous connectivity. It is because of the rising demand for high-class backhaul equipment to meet the changing connectivity standards of 5G technology. That is, the higher number of implementations of 5G network connectivity, therefore, acts as a catalyst for growing the wireless and mobile backhaul equipment market in an ever-evolving wireless communication space.

The onset of 5G introduces a surge in backhaul capacity demands for the radio access network site. In 2025, it will vary between 3Gbps and 20Gbps for urban areas. It is due to communications service providers rolling out varying amounts of new radio spectrum and advanced RAN features. In rural environments with capacity ranging from 300Mbps to 2Gbps in 2025, microwave technology will form the backbone for 38 percent of backhaul connections worldwide by 2025. A changing 5G roll-out landscape is placing new and different requirements due to the need for flexible, high-capacity backhaul, which meets both urban and rural deployment scenarios.

Asia-Pacific Holds the Largest Wireless and Mobile Backhaul Equipment Market Share

The wireless and mobile backhaul equipment market is largely dominated by Asia-Pacific. Several factors have continued to contribute to the region's dominance in electronic manufacturing. Countries such as China, Taiwan, South Korea, and Japan are emerging as key contributors in the global wireless and mobile backhaul equipment landscape. Well-established electronics manufacturing infrastructure, cost-effective labor, and a strong ecosystem of suppliers and components make Asia-Pacific a strong leader.

While fiber dominates backhaul deployment in China and large parts of Northeast Asia, other parts of the world see a complementary mix of different technologies. In some cases, microwaves are a must-have for offering mobile services and act as a backup, improving the network's reliability, especially in common fiber cuts, such as during roadworks. India is a market with significant microwave deployment in backhaul arena and has the highest deployment rate of 5G systems. Given its competitive pricing and mobile as the primary means of broadband, India is expected to have the highest average mobile data traffic per smartphone between 2023 and 2028. Given India's strong growth prospects in 5G subscriptions, it is likely to retain a high proportion of microwave backhauled sites.

Government Initiatives to Propel the Market Demand

In July 2020, Member States collectively agreed to a recovery effort called NextGenerationEU (NGEU) to fight the effects of the crisis, providing EUR 750 billion in loans and grants to EU Members. NGEU assigned USD 729.12 billion (EUR 672.5 billion) to the recovery and resilience facility (RRF), including EUR 360 billion for loans, and USD 338.81 billion (EUR 312.5 billion) for grants, where 20% or USD 140.95 billion (EUR 130 billion) were assigned to digital activities. Horizon Europe received an additional USD 5.42 billion (EUR 5 billion).

RRF complements strategic and research investments of the Connecting Europe Facility (CEF) and Digital Europe Program. Several countries, including France and Germany, have stated 5G is key for recovering from the pandemic. Telecom Italia secured a large part of a USD 4.21 billion (EUR 3.88 billion) public funding tender to deploy 5G base stations and fiber backhauling, which will allow the connection of more than 11,000 base stations by June 30, 2026, for which public funding will cover up to 90% of the costs. A few months after the Italian government announced to spend more than USD 2.17 billion (EUR 2 billion) to invest, TIM won a major part of the tender. The money will be spent to build and connect new 5G sites in more than 2,000 municipalities throughout Italy, offering download speeds of up to 150 Mbit/s and uploads up to 50 Mbit/s.

Key Players Landscape and Outlook

The wireless and mobile backhaul equipment market is expanding due to the increasing emphasis placed by companies worldwide on establishing 5G infrastructure. Furthermore, the market expansion is exponentially facilitated by investments made by companies to enhance research and development resources, engagements in collaboration projects, bolstering marketing efforts, and expanding distribution networks. These factors collectively contribute to the rapid expansion of the market.

In October 2022, India's major telecom company, Reliance Jio Infocomm Ltd., announced long-term deals with Ericsson and Nokia for 5G network equipment. These deals with the Swedish and Finnish telecom infrastructure firms include 5G RAN equipment, base stations, massive MIMO antennas, and network software that builds a 5G standalone. Jio specified that it will deploy Ericsson's RAN equipment and mobile backhaul solutions, among other things.

In August 2022, Kacific partnered with Vodafone PNG to provide mobile backhaul services in rural areas. The initiative sees an expansion of the Vodafone PNG voice and 3G/4G data network into the country's remote areas of Papua New Guinea, digitally transforming government, schools, enterprises, and communities. Kacific operates across the Asia Pacific, including New Zealand, Singapore, Australia, Fiji, PNG, and other Pacific Islands, and it is driving to improve mobile connectivity and services in rural areas.