Mobile Data Growth Boosting Backhaul Demand

ms09_mbk_2h08_chartThanks to the emergence of superphones like the iPhone (s aapl), the BlackBerry Bold (s rimm) and the T-Mobile G-1, we have seen a steady increase in the demand for mobile data services. The easy availability of popular web services such as Facebook and Google Mail (s goog) on higher-end feature phones has only helped boost the demand for mobile data. And such demand has helped carriers overcome stagnating voice- and text-related revenues, especially in the U.S., as the quarterly results of major phone companies show.

Cole Brodman, chief technology office of T-Mobile USA, in a recent GigaOM interview said that the company is currently providing 6 Mbps per site. “Tomorrow I think the first steps are going to be something more like 20-25Mbps, quickly followed by 50Mbps, and eventually getting to 100Mbps-plus,” he said. T-Mobile isn’t alone in its scramble to bulk up the backhaul as according to some forecasts, there will be more than a billion mobile broadband phone subscribers by end of 2010. While data has been a good way for the wireless operators to scoop up easy cash, they’re all facing a future in which they’ll be spending a lot of money on infrastructure. According to market research firm Infonetics Research:

  • By 2010, data traffic will surpass voice traffic on mobile networks.
  • Mobile backhaul equipment investments jumped a healthy 19 percent in 2008 to $4.6 billion worldwide, and revenue is set to explode over the next five years and beyond.
  • Demand for mobile backhaul equipment is seen topping $10 billion by 2011.

Why? Because as In-Stat, another market research firm, notes, carriers worldwide will need some 90,000 Gbps of capacity in the last mile of the backhaul network by the end of 2013 to support the world’s cellular and WiMAX networks. The big boost will come for the backhaul Ethernet-based equipment, whether in the form of microwave, fiber or copper. Microwave will be a big winner, Infonetics predicts. Roughly 60 percent of backhaul cell site connections in most regions of the world are microwave, the firms estimates, and demand is growing fast, including here in the U.S.

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