Will India drive mobile backhaul equipment market in 5 years?

mobile backhaul equipment market trends
Telecom network vendors can bet on mobile backhaul equipments because several telecoms will be spending heavily on equipments to transport mobile traffic.

A surprise push will come from India, the second largest telecom subscriber market in the world. The growth driver from India will be India’s 4G LTE service providers such as Reliance Jio Infocomm, Bharti Airtel, Idea Cellular and Vodafone India.

Reliance Jio Infocomm is going for a nation-wide 4G LTE network roll out with the commercial launch slated for early next year. Today, RIL Chairman Mukesh Ambani said Reliance Jio Infocomm, the 4G arm of RIL, has invested Rs 3,900 crore in Punjab, one of the key states in India. Reliance Jio will be spending nearly $20 billion for its 4G venture.

Bharti Airtel 4G has reached 330 towns in 12 states till now. Airtel does not talk about its 4G investment plans.

Vodafone India will be starting its 4G LTE network launch this year end. Part of key cities will be covered, said Vodafone India.

Idea Cellular will be launching 4G LTE in as many as 600 towns.

Telecom network operators will be spending a cumulative $45 billion on macrocell mobile backhaul equipments worldwide over the five years from 2015 to 2019, according to IHS Infonetics Macrocell Mobile Backhaul Equipment report.

Richard Webb, research director for mobile backhaul and small cells at IHS, said that developing countries later to the LTE party, such as India, will drive steady growth over the next few years, which will gain extra momentum from early 5G adopters.

Other key 4G telecom markets such as North America and China have already made significant investments in LTE networks.

The telecom analysis report said that macrocell mobile backhaul equipment revenue declined 0.6 percent to $8.5 billion in 2014.

The report found that global demand remains solid from 4G LTE network deployment, 3G network expansion and backhaul capacity enhancement, but increasing pressure on equipment pricing is inhibiting revenue growth.

IP/Ethernet remains the driver of the mobile backhaul equipment market, required to do the heavy lifting for ever-growing mobile bandwidth usage.

Microwave radio was the largest spending category in 2014, at 47 percent of global mobile backhaul gear revenue, though this segment is projected to decline as more fiber and wireline Ethernet come into play.

Toward 2019, 5G backhaul demand starts to drive the market, pushing the microwave segment back to modest year-over-year revenue growth.

Baburajan K
[email protected]