Mobile fronthaul equipment market to grow at a 26% CAGR through 2021

Richard Webb, associate director, research and analysis, mobile backhaul and small cells, IHS Markit, reports that worldwide mobile fronthaul equipment revenue totaled $787 million in 2016, with the majority coming from Asia Pacific. He says the market has long-term potential as solutions evolve from Common Public Radio Interface (CPRI)-based to Ethernet-based.

He forecasts that the global mobile fronthaul equipment market will grow at a compound annual growth rate (CAGR) of 26.4% from 2017 to 2021, when it will reach $2.5 billion. Wavelength-division multiplexing (WDM) equipment will continue to dominate. He adds that millimeter wave (mmW) entered the mobile fronthaul market in 2017 and is anticipated to comprise 12% of overall revenue by 2021.

He writes, “To date, the mobile fronthaul equipment market has remained modest in size, with very little shipment data reported by vendors—a clear indication that the market has yet to fully take off. Deployments thus far have been hamstrung by high costs, scalability complexities, and fronthaul performance concerns.

“In 2016, global mobile fronthaul equipment revenue totaled $787 million, growing 56% over the prior year. Wireline made up the entirety of the mobile fronthaul market in 2016—but millimeter wave entered the market in 2017 and will comprise 3% of total revenue. Millimeter wave is anticipated to grow to 12% of revenue by 2021, mostly utilized in small cell-like deployments.”

He says that Asia Pacific held the majority of mobile fronthaul revenue with 82%, followed by North America, EMEA (Europe, Middle East, and Africa) and CALA (Caribbean and Latin America).

He adds, “The first trials of mobile fronthaul in live operator networks date back to 2013, and due to the complexity of the overall centralized RAN (C-RAN) architecture that mobile fronthaul supports, it will take a long time for mobile fronthaul technologies to become mainstream.

“Nevertheless, 2016 saw several commercial deployments and a number of trials continuing ahead of an expected larger ramp of deployments from 2017 onward. To this end, IHS Markit forecasts the global mobile fronthaul equipment market to grow at a CAGR of 26.4% percent from 2017 to 2021, when it will reach $2.5 billion.

“Passive WDM accounted for 21% of wireline revenue share in 2016, with active holding the remaining 79%. By 2021, however, passive WDM is expected to hold just 7% of wireline revenue, with active WDM making up 93%. Within the passive WDM category, passive optical network (PON) equipment may come into play as the fronthaul market evolves.”

The annual IHS Markit mobile fronthaul equipment market report covers forecasts, analysis, and trends for mobile fronthaul, including CPRI optical and wireless solutions. It examines the migration from distributed to C-RAN architectures and looks ahead to cloud RAN, a roadmap architecture in which the baseband unit (BBU) is virtualized and runs on commercial servers used within a network functions virtualization (NFV) infrastructure.

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