Mobile and Wireless Backhaul Market Trends

Mobile and Wireless Backhaul Market Drivers

Growing Demand for High-Speed Internet Connectivity

• The ever-growing appetite for broadband internet, fueled by growth in web-based gaming, video streaming, and home and remote working, is powering the world wireless and mobile backhaul market.The International Telecommunication Union (ITU) documents worldwide internet traffic has grown by more than 45% in the past five years. Governments, such as the U.S. through its Infrastructure Investment and Jobs Act, are spending billions to extend broadband coverage, and operators such as Ericsson and Huawei are leading the way in deploying 5G to fulfill increasing demand. This change is generating enormous demand for high-end backhaul infrastructure globally.

Rapid Adoption of 5G Technology

• Global 5G technology deployment is fuelling demand for advanced backhaul solutions, considering that it allows for higher data speeds, lower latency, and broader connectivity. Over 160 countries have launched 5G services commercially, with governments like South Korea having invested significant amounts, the Global Mobile Suppliers Association (GSA) reports. Nokia and Ericsson are among companies rapidly expanding 5G infrastructure, adding further momentum to mobile backhaul market growth.

Mobile and Wireless Backhaul Market Restraints

High Capital Investment for Infrastructure Deployment

• The huge capital investment needed for infrastructure deployment is still a major issue in the wireless and mobile backhaul industry. Governments across the globe, including the U.S. and EU, provide billions of funding through programs such as the U.S. Infrastructure Investment and Jobs Act and the EU's Digital Decade initiative. Yet, firms like Ericsson and Nokia continue to experience challenges in accessing sufficient investment to construct networks, particularly in rural areas. Also, the investment to roll out 5G networks, which is projected to exceed USD 1 trillion worldwide by 2025, severely tests telecom operators' capital resources.

Spectrum Availability and Licensing Issues

• Spectrum availability and licensing pose serious issues in the mobile and wireless backhaul space. For the International Telecommunication Union (ITU), much of Africa and Southeast Asia remains to be plagued by spectrum delay in allocation. In the United States, record prices at the Federal Communications Commission's (FCC) auctions have further strained the financial burdens of operators such as Verizon and AT&T. Moreover, in countries like India, slow auctions of the spectrum and regulatory complexities hamper effective deployment, limiting the expansion of backhaul networks. These complications hamper network upgrades in a timely manner, particularly for 5G services, limiting market growth overall.