Smartphones are expected to push small cell backhaul revenues past $500 million by 2017, says Dell'Oro
The explosion in smartphones is expected to push small cell backhaul revenues past $500 million by 2017, according to a new report by the Dell'Oro Group.
Operators are increasingly using small cells to expand mobile broadband coverage, and backhaul connects the small cells to the core network.
"The industry has come a long way since the first smartphones entered the market; however, we are still just in the beginning phase of realizing the potential of innovative business models and applications coupled with a high performance mobile broadband network," said Stefan Pongratz, analyst with the Dell'Oro Group.
The report predicted that non-line-of-sight and line-of-sight microwave will account for more than 60 percent of all external backhaul deployments by 2017.
In addition, the installed base of unlicensed small cells are expected to make up nearly 90 percent of total small cell installed base by 2017, and licensed evolved (metro) small cells will make up 2 percent of total radio access network revenues by 2015.
"While the macro network and unlicensed small cells have been for the most part sufficient to cope with current usage models, the commitment levels are high for improving spectrum utilization in the licensed spectrum. It is no longer a question of whether licensed small cells will play a role—the question is more how and when," commented Pongratz.
Overall, the small cell market is forecast to reach $2.7 billion by 2017, according to Infonetics Research stats.
"AT&T (NYSE: T), Sprint (NYSE: S), and Verizon Wireless (NYSE: VZ) in the U.S., Vodafone (NASDAQ: VOD) in Europe, LG U+ in South Korea, and NTT DoCoMo in Japan have all announced major small cell plans, driven by the need to enhance the capacity of saturated macrocellular networks as they seek to deliver denser, higher-capacity coverage to tech-savvy populations in urban areas," said Stéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics.