5G Fronthaul And Backhaul Equipment Market Size, Share, Opportunities, COVID-19 Impact, And Trends By Equipment (Fronthaul Equipment (Fiber Direct Connection, Passive WDM Connection, Active WDM/OTN/SPN Connection, Millimeter Wave), Backhaul Equipment (IP RAN, PON, OTN, WDM, Millimeter Wave, Others)), Type (Fixed, Wireless), And By Geography - Forecasts From 2023 To 2028
- Published : Jan 2023
- Report Code : KSI061613821
- Pages : 146
The 5G fronthaul and backhaul equipment market was valued at US$2,397.002 million in 2021 and is expected to grow at a CAGR of 37.22% over the forecast period to reach a market size of US$21,959.533 million by 2028.
5G, the fifth-generation mobile network, has not yet taken off completely but is anticipated to offer a new type of network that can connect virtually everyone and everything.
The new wireless standard is designed in a way that would allow it to deliver data speeds higher than those in earlier generations, ultra-low latency, immense network capacity, better network availability, and a degree of improvement in performance and efficiency that would connect a wider group of customers, industries, and components, both small and large, across the ecosystem. The 5G fronthaul and backhaul equipment market growth are majorly being driven by the increasing flow of investments by 5G-enabling companies across the globe into making the infrastructure 5G-ready. This flow of investments is witnessing a continuous increase in velocity as governments across countries seek to gain wireless leadership by being the first to roll out 5G for customers. For instance, China, Japan, South Korea, and the United States are the key competitors in this race to win the 5G lead. What has been making this environment more competitive is the fact that losing the wireless leadership can significantly hit a country’s economy. The U.S., for instance, lagged in the deployment of 2G and 3G, and this led to the migration of economic advantages outside of the country. Japan and Europe, on the other hand, despite leading the world in 3G and 2G respectively, lost this race to the U.S. when 4G was yet to take off, and this affected their communication and technology industries. Wireless leadership brings with it an impetus to a country’s economic growth, besides creating millions of jobs in next-gen sectors like smart cities and the Internet of Things (IoT). This is a major factor responsible for huge investments in the sector.
According to data from Accenture, America’s communication and technology industry is poised to funnel $275 billion into the deployment of 5G networks, and these investments would bring with them an increase of around 3 million in new jobs and an addition of around $500 billion to the economy. However, taking a lead in new wireless standards deployment is not easy. Governments need to take action in quickly resolving issues about setting a clear schedule for spectrum auctions and finalization of a roadmap for the modernization of infrastructure siting rules, among other pending legislation and regulatory reforms.
Initially, the deployment of 5G is being carried out for enhanced mobile broadband applications that cater to human-centric needs, which include, but are not confined to, faster access to multimedia content and various other services. Applications of enhanced mobile broadband are witnessing a continuous expansion, and these applications require networks with improved performance to offer a seamless experience to users, which was difficult to achieve with previous-generation networks. As we continue to advance into a smarter society, many smart infrastructure applications may need to be complemented with network hotspots. Hotspot zones can be referred to as zones that have high user density, networks with very high traffic handling capacity, and user data rates that are usually much higher than those in wide area networks.
As we continue to see improvements in these sectors, we expect to see more efficient data transmission across the globe, translating into a lowering of the cost for the transmission of every bit of data. The 5G ecosystem is already witnessing a very heavy inflow of investments by industry players. For instance, 5G providers in South Korea have already registered millions of 5G subscriptions since its launch in April 2019. Three key vendors of 5G in the country are offering 5G by leveraging both the 3.5GHz spectrum and 28GHz (mmWave).
A major share of the demand for 5G is being contributed to by governments and industrial sectors that require highly reliable communication channels with very low latency, and which adhere strictly to the strict requirements in terms of network throughput, availability, and latency. Many municipalities are expected to deploy the Massive Internet of Things, which is characterized by the presence of a very large number of connected devices continuously transmitting data of varying priority levels over the network. As 5G will bring down the cost of enabling massive IoT, while robust modules with long life and high reliability will continue to facilitate applications like continuous asset tracking, smart cities, and continuous monitoring of vital infrastructure, the demand for 5G will continue to grow, thus propelling the demand for 5G fronthaul and backhaul equipment to support the expansion.
The market growth is also being driven by increasing demand for faster internet connection by people in many regions. This demand continues to increase as people continue to gravitate toward the consumption of content that requires high-speed internet to be consumed. The use case of 5G will not be confined to this, as many mission-critical applications, which have been struggling with getting a reliable internet connection to reach their complete potential, will also account for a fairly large share of 5G use. Completely autonomous vehicles, which are still in the trial phase in many countries, can be expected to come on the road as 5G penetrates this segment. Self-driving cars are witnessing a heavy inflow of investments in them. In February 2019, SoftBank Vision Fund pumped funding of $840 into Nuro’s self-driving car. In the same, year, Uber secured funding of $1 billion and General Motors’ Cruise unit got funding of $1.15 billion to catalyze R&D in self-driving cars.
This year, Waymo has been securing some major funding in the autonomous vehicle segment. In March 2020, the company had already announced a $2.25 billion funding round. In May 2020, the company received funding of $750 million in fresh capital from investors. This round of funding was led by T. Rowe Price Associates, Fidelity Management and Research Company, and Perry Creek Capital. T. Rowe Price Associates has been pumping money into Cruise as well. The autonomous vehicle is just one segment that is expected to benefit significantly from the 5G network. Smart Grids are also expected to benefit from the arrival of 5G. This is another segment that requires a highly reliable and low-latency internet connection to yield results. This sector is also witnessing a fairly heavy inflow of investments by entities that see immense growth potential locked underneath.
According to the Knowledge Sourcing Intelligence estimates, the global smart grid market was valued at US$20.540 billion in 2019 and is expected to grow at an impressive CAGR of 23.62% over the forecast period to reach a total market size of US$73.316 billion in 2025. Other sectors which are expected to remain, major end-users of 5G, include telehealth, industrial automation, drones, smart agriculture, geolocation and tracking, and numerous others. As has already been discussed, these are all expected to contribute to the total value added by 5G to the global GDP. Since this value is expected to be very high, companies are pumping resources rigorously into 5G, which is driving the demand for backhaul and fronthaul equipment required for it. The outbreak of the novel coronavirus disease also has a significant role in shaping market growth.
Since the reliance of customers, both individuals and industrial sectors, on technology infrastructure has grown significantly since the disease outbreak, market players are pumping even more investment into 5G equipment. This pandemic can be seen as causing disruptions in the way businesses used to operate. With working remotely picking up pace, and is expected to become the norm over the short or medium term, the demand for improved wireless network infrastructure is also expected to increase significantly, thus driving the market growth.
Geographically, the 5G Fronthaul and backhaul equipment market have been segmented into North America, South America, Europe, the Middle East, and Africa, and the Asia Pacific. To give a clearer view of the market, these regional markets have been further segmented into countries that account for a considerable market share.
The Asia Pacific accounts for a significant market, share in the global market and the market growth in this region is majorly attributed to the heavy flow of investments into 5G in countries like China, Japan, and South Korea. These three economies rank high in the list of countries with 5G investments. North America and Europe also account for a fairly large market share. The United States leads the race in 4G commercialization, thus leaving Europe and Japan behind. Since losing the race to bring a new wireless standard can come with high costs, these two regions are making huge investments in 5G. Other regions like South America and the Middle East and Africa account for a relatively small market share, and these regions are expected to show decent market growth over the projected period.
Huawei Technologies Co., Ltd., Qualcomm Technologies, Inc., and Telefonaktiebolaget LM Ericsson are among the prominent key market players in the 5G Fronthaul & Backhaul Equipment market. These companies hold a noteworthy share of the market on account of their good brand image and product offerings. Major players in the portfolio management system market have been covered along with their relative competitive positions and strategies. The report also mentions recent deals and investments of different market players over the last two years.
Key Developments in the Market:
- In March 2020, Ericsson and Chunghwa Telecom Co. Ltd. (CHT) entered into a partnership agreement wherein the former supported the latter in offering the 5G platform for its future network. As part of this agreement, Ericsson also supplied a fronthaul and IP backhaul transport solution based on its Fronthaul 6000 and Router 6000 solutions to support C-RAN architecture.
- In February 2021, DZS, a leading intelligent, packet-based mobile transport, and broadband access converged edge solutions provider, launched the DZS Chronos mobile transport solutions portfolio, which serves communications service providers and enterprise customers in over 100 countries. The full collection of cutting-edge Fronthaul, Midhaul, and Backhaul capable DZS Chronos systems offer topologies and architectures for Open RAN, and Virtual RAN approaches employing both packet and optical transport technologies, and they are open, software-defined, and proven.
- In November 2021, DISH Wireless and Cisco entered into a strategic multi-layered partnership to speed up 5G services in the US. DISH will develop the United States' first smart 5G network with Cisco, unlocking the value and benefits of 5G for companies. As per the agreement, DISH will be supported by Cisco's IOS-XR operating system for 5G and Cisco NCS series routers for backhaul and fronthaul transport, among many other services.
COVID-19 Impact on 5G Fronthaul & Backhaul Equipment Market:
COVID-19 had a positive impact on the fronthaul and backhaul equipment market. Amid the surge in active cases across the globe, multiple governments have enforced lockdown and social distancing measures to slow down the spread of infection. Consequently, many firms adopted a hybrid work-from-home model. The increasing demand for a faster network connection and growing penetration of 5G networks augmented the demand for efficient fronthaul and backhaul solutions in the market.
5G Fronthaul & Backhaul Equipment Market Scope:
|Market Size Value in 2021
|Market Size Value in 2028
|CAGR of 37.22% from 2021 to 2028
|Forecast Unit (Value)
|Equipment Type, Technology, And Geography
|North America, South America, Europe, Middle East and Africa, Asia Pacific
|Samsung, Huawei Technologies Co., Ltd., Zte Corporation, Nokia, Telefonaktiebolaget Lm Ericsson, Cisco, Blu Wireless, Fiberlight Llc., Fujitsu Limited, Intel Corporation
|Free report customization with purchase
- By Equipment
- Fiber Direct Connection
- Passive WDM Connection
- Active WDM/OTN/SPN Connection
- Millimeter Wave
- IP RAN
- Millimeter Wave
- By Type
- By Geography
- Europe, Middle East and Africa
- Asia Pacific
- South Korea
Frequently Asked Questions (FAQs)
1.1. Market Overview
1.2. Market Definition
1.3. Scope of the Study
1.4. Market Segmentation
1.7. Base, and Forecast Years Timeline
2. RESEARCH METHODOLOGY
2.1. Research Design
2.2. Research Data
3. EXECUTIVE SUMMARY
3.1. Key Findings
4. MARKET DYNAMICS
4.1. Market Drivers
4.2. Market Restraints
4.3. Porter’s Five Forces Analysis
4.3.1. Bargaining Power of Suppliers
4.3.2. Bargaining Power of Buyers
4.3.3. Threat of New Entrants
4.3.4. Threat of Substitutes
4.3.5. Competitive Rivalry in the Industry
4.4. Industry Value Chain Analysis
5. 5G Fronthaul & Backhaul Equipment Market, By Equipment
5.2.1. Fiber Direct Connection
5.2.2. Passive WDM Connection
5.2.3. Active WDM/OTN/SPN Connection
5.2.4. Millimeter Wave
5.3.1. IP RAN
5.3.5. Millimeter Wave
6. 5G Fronthaul & Backhaul Equipment Market, By Type
7. 5G Fronthaul & Backhaul Equipment Market, By Geography
7.3. Europe, Middle East and Africa
7.4. Asia Pacific
7.4.3. South Korea
8. COMPETITIVE ENVIRONMENT AND ANALYSIS
8.1. Major Players and Strategy Analysis
8.2. Emerging Players and Market Lucrativeness
8.3. Mergers, Acquisitions, Agreements, and Collaborations
8.4. Vendor Competitiveness Matrix
9. COMPANY PROFILES
9.2. Huawei Technologies Co., Ltd.
9.3. ZTE Corporation
9.5. Telefonaktiebolaget LM Ericsson
9.7. Blu Wireless
9.8. FiberLight, LLC
9.9. Fujitsu Limited
Huawei Technologies Co., Ltd.
Telefonaktiebolaget LM Ericsson
|Get Sample PDF
|Wireless Connectivity Market Size & Share: Report, 2023 - 2028
|China Wireless Connectivity Market Size: Report, 2023 - 2028
|Wireless Mesh Network Market Size: Industry Report, 2021-2026
|5G Services Market Size & Share: Industry Report, 2023 - 2028
|5G Fixed Wireless Access Market Size & Share: Report, 2019-2024