Dell’Oro Group published an update to the Microwave Transmission & Mobile Backhaul Transport Five-Year Forecast report in January 2021
The following are key takeaways from the newly released report:
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- We remain concerned about the COVID-19 pandemic, and believe it will continue to influence the mobile backhaul and microwave transmission markets this year, as it did throughout 2020. If additional lockdowns do occur, we expect that similar to last year supply-chain issues will cause a slowdown in deployments. Also, as a result of the pandemic’s damage on the 2020 world economy, we remain concerned that a second recession could occur in 2021 or 2022, depending on government economic policies this year. That said, we are optimistic that as COVID-19 vaccines are distributed, service providers will find the confidence to invest in their networks.
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- For the cumulative five-year forecast period that includes 2021 through 2025, we predict the Mobile Backhaul Transport market revenue, consisting of fiber/copper and wireless systems, to be $25 billion. During this period, the cumulative Microwave Transmission market revenue, driven mostly by mobile backhaul, is expected to be just over $16 billion.
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- We expect the rollout of 5G to be the main driver of market growth for both the Mobile Backhaul Transport and Microwave Transmission markets. We estimate that 67 percent of Mobile Backhaul Transport revenue and nearly half of Microwave Transmission revenue will be generated from equipment deployed in 5G networks by 2025. In addition to backhaul, we believe 5G will increase the use of Fronthaul.
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- With each generation of mobile radio technology, the use of Fiber/Copper Systems for Mobile Backhaul Transport has increased, and naturally, we predict this share will continue to rise with 5G deployments. Therefore, we forecast Fiber/Copper System shipments to exceed those of Wireless Systems throughout the forecast period. However, the increasing use of Fiber/Copper as a share of link shipments will likely plateau at approximately 70 percent since many operators will still rely on Wireless Systems such as point-to-point Microwave Transmission.
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- The Microwave Transmission market is forecast to grow at a low single-digit percentage rate for the next five years. We predict that Packet Microwave will be the only microwave transmission technology segment that grows over the next five years, driven by rising demand for full outdoor units and E/V Band systems. We forecast Packet Microwave revenue to grow at a 10 percent CAGR.
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- E/V Band system sales have been relatively modest but steadily rising in use. Due to higher capacity requirements for 5G and spectrum constraints on lower frequency bands, we expect growing demand for E/V Band systems. Therefore, we forecast annual E/V Band shipments to more than triple by 2025.
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