Dell'Oro: Mobile backhaul and optical transport markets to experience growth through 2016

The Dell’Oro Group recently released two new five-year forecast reports on two segments of the telecommunication networking market, mobile backhaul and optical transport.

In its mobile backhaul report, Dell’Oro Group says the mobile backhaul market, including transport and routers/switches, is expected to reach $9 billion by 2016. Backhaul transport is forecast to grow at a 2% compounded annual growth rate (CAGR) to $6 billion, while routers and switches should grow at a 9% CAGR to nearly $3 billion to represent 30% of the mobile backhaul market by 2016.

“Demand for mobile backhaul is growing at a healthy pace as operators deploy additional cellular sites and upgrade to an all-IP network,” says Jimmy Yu, vice president of mobile backhaul market research at Dell’Oro Group. “Since mobile radios are carrying more packet data than voice circuits and an even greater amount in the future, we anticipate operators will continue to evolve their backhaul networks to increase throughput and efficiency with routers and switches at cell sites and network edge.”

According to the Mobile Backhaul 5-Year Forecast Report, operators will deploy micro and pico cells, or small cells, for capacity in metro areas following the rollout of macro cell sites to provide better coverage. The requirements for small cell backhaul are expected to favor non-line-of-site solutions.

A second report on the optical transport market predicts the worldwide market revenue will grow at a 7% CAGR driven by the demand for a new generation of equipment.

“The optical transport market is in its next stage of transformation,” say Yu, who also handles optical equipment research at Dell’Oro. “In each new generation of optical equipment, there have been two distinct evolutions. The first being higher-speed interfaces and the second being better packet transport capabilities.”

Yu says the market for higher-speed interfaces is moving rapidly to 100-Gbps DWDM, and wavelength shipments are expected to grow at greater than 120% each year for the next five years. In the area of improved packet-transport capabilities, the market is moving to OTN and MPLS/MPLS-TP as it departs from SONET/SDH as a legacy network element, according to the Dell’Oro report.