Operators Showing Preference for Ethernet Over Fiber for Small Cell Backhaul, Study Shows



  • Respondent operators have yet to scale up their small cell deployments, but by 2019 they plan to place 10 percent of their macro network traffic onto small cells
  • Ethernet over fiber will be the most-used technology for in-building small cell backhaul connections by 2018, with three-quarters of respondents showing a preference for dedicated fiber
  • Survey respondents’ top two drivers for deploying network functions virtualization (NFV) in backhaul networks are operational efficiency and flexibility—typically the same drivers as for any type of NFV deployment

Our Analysis

Small cell backhaul is a small piece of the mobile backhaul equipment market, only comprising around $120 million of 2015’s $8.4 billion total. There were over 42,000 small cell backhaul connections/links deployed during 2015, and the number of connections/links is expected to grow to over 875,000 in 2020—a five-year installed base of approximately 2.4 million.

2016 is showing that there is a modest but steadily increasing market for outdoor small cell deployment. Factors such as planning site acquisition, sourcing backhaul connections and power, availability of spectrum and higher costs remain challenges but are gradually eroding. Nonetheless, operators are moving forward with in-building and outdoor small cell deployments sometimes in conjunction with other options for network density such as distributed antenna system (DAS), remote radio head (RRH) and carrier WiFi, which are all complementary solutions to small cells.

One primary consideration is the need for fiber. Fifty-two percent of operators participating in our study said that Ethernet over fiber (EoFiber) is their preferred technology for outdoor small cells. Copper may sometimes be a viable alternative, but it may not be of suitable capacity. Microwave comes into play when wireline is not viable or cost effective. It offers a range of options, including non-line-of-sight, point-to-multipoint and millimeter wave, all of which may be required for specific circumstances.

As the market scales up, much more about the landscape will be brought to light, but with small cell deployments likely in a range of locations, no single backhaul technology will be a universal solution and no single vendor is likely to dominate.

It’s still early days, but overall our survey reveals mixed messages in terms of how respondents will go about small cell deployments and what they need in terms of equipment. This is hardly surprising, given that deployment scenarios are likely to be so varied—all of which adds up to a range of challenges that will require a breadth of products and features.

Small Cell Survey Synopsis

For its 29-page small cell backhaul survey, IHS Markit interviewed purchase-decision makers at 21 service providers from Europe, the Middle East and Africa, Asia Pacific, the Caribbean and Latin America, and North America about their current and future plans for small cell backhaul. The study provides insights into mobile traffic handling and specific backhaul issues related to in-building and outdoor small cells.

For information about purchasing this report, contact the sales department at IHS Markit in the Americas at (844) 301-7334 or AmericasLeads@ihsmarkit.com; in Europe, Middle East and Africa (EMEA) at +44 1344 328 300 or technology_emea@ihsmarkit.com; or Asia-Pacific (APAC) at +604 291 3600 or technology_APAC@ihsmarkit.com.

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