The mobile fronthaul optics market will resume growth in 2016, following temporary market softness in 2015, and reach more than $1 billion in sales by the year 2020, according to LightCounting market research.
In the second edition of its ‘Mobile Fronthaul Optics’ report, LightCounting provides a detailed look at the mobile fronthaul and backhaul optical transceiver landscape, including a five-year forecast of shipment volumes, prices and revenues, broken down by speed and reach. Factors such as current and future fronthaul architectures, service provider deployment trends, component requirements, products sold today, and future needs are also discussed. The report also includes profiles of leading vendors of optical fronthaul transceivers, historical shipment data, and a visual guide to mobile networks.
Taking into account the above information, the market research company is confident that mobile fronthaul optics will experience significant growth during the next five years. In the report, it highlights that China Mobile deployed 733,000 LTE (long-term evolution) base stations in 2014; however, only around 100,000 will be installed in 2015. This has partly been attributed to a politically driven reorganisation of the industry.
China Telecom and China Unicom have increased their LTE deployments, but LightCounting believes it’s not enough to offset the decline in China Mobile’s consumption. However, LTE is still rising globally, and the company believes initial deployments and capacity upgrades will increase demand for fronthaul transceivers steadily from now through 2020.
The report’s predictions are supported by LightCounting’s analysis of recent mobile traffic growth data, which illustrates the shift to mobile networks since the emergence of smartphones, and puts mobile traffic growing at rates 20-25 points higher than overall Internet traffic. According to the report, the data from China is even more dramatic, showing a rise in traffic growth in 2015, following deployment of LTE by China Mobile the year before.
Over the next five years, the growth estimates range from 60 to 40 per cent per year, meaning that mobile networks will have to carry seven times more traffic in 2020 than in 2015. Furthermore, estimates of mobile data traffic growth have been increasing – for example, Ericsson raised its estimated compound annual growth rate (CAGR) from 45 to 55 per cent between its 2014 and 2015 Mobility Reports. Despite predictions of significant use of 25G modules for fronthaul starting in 2018, LightCounting forecasts growth rates for fronthaul bandwidth as being lower than the traffic growth rates. The company came to this conclusion after calculating the total cumulative bandwidth implied by its fronthaul forecast, then calculating the associated growth rates, and comparing them to the traffic growth rates. It should be noted that LightCounting feels its forecast is conservative.