Mobile backhaul equipment is having a good season due to early 4G LTE deployments and continuing HSPA/HSPA+ deployments. The latest Infonetics Researchmobile backhaul market analysis shows 36% year-over-year growth in Ethernet-based equipment and services, which is expected to reach $4.8 billion this year — a full 80% of total backhaul spending.
Infonetics co-founder Michael Howard said he sees no slowdowns for Ethernet in the foreseeable future now that packet timing and synchronization improvements have been made. Howard noted that 100 global operators are deploying a single IP-Ethernet backhaul to carry all traffic. At the same time, TDM microwave backhaul spending is declining significantly as Ethernet rises, according to Infonetics’ Richard Webb, who analyzes the microwave market and co-authored the report. Webb said he expects the mobile backhaul equipment market to grow to an estimated $8.2 billion by 2014, largely due to Ethernet.
Ericsson leads the vendors in the microwave radio mobile backhaul market, according to Infonetics, followed by Huawei, Nokia Siemens and NEC. In Ethernet backhaul, however, Alcatel-Lucent took the top spot in the first half of 2010 due to its sales of Ethernet cell site routers and gateways, edging out Tellabs, Cisco and Huawei. The Ethernet mobile backhaul market is expected to grow 367% this year alone.
Alcatel-Lucent is understandably pleased with its Ethernet backhaul win, which accounts for 23% of the Ethernet cell site gateway and router market. Timed to coincide with the 4G World trade show in Chicago and the Infonetics Research report, Alcatel-Lucent announced enhancements to its “AnyG to LTE” radio access technologies that support 2G, 3G and LTE. The company added its 7705 Service Aggregation Router-18 (SAR–18) to its mobile backhaul portfolio, a solution that also has unified network and policy management from the radio access network (RAN) to the packet core.
Alcatel-Lucent’s Gary Leonard, mobile IP unit senior director of product marketing, said that while the backhaul market is definitely moving to Ethernet in all of its forms and packet IP is replacing TDM and ATM, only 3% of cell towers were connected via Ethernet/IP in 2009. “We think that will jump to 33% by 2013, but that means the majority of existing toward are using TDM or ATM legacy backhaul solutions,” Leonard said. “We’re shipping more Ethernet ports than ATM ports, but TDM and ATM aren’t dying.”
Equipment needs to support legacy interfaces, even where there are IP/Ethernet connections available, Leonard added. “Everybody wants to move more traffic at lower cost, but not all cell sites have the connectivity,” he said. Clearly introducing a service aggregation router that can handle 2G, 3G and 4G in one box positions Alcatel-Lucent as the vendor that has its eye clearly on LTE, but isn’t forgetting that it will take years for mobile backhaul to catch up to the fastest and cheapest technology around.