NSR’s Wireless Backhaul via Satellite 11th Edition report, releasing tomorrow, forecasts the global installed base of satellite backhaul sites to surpass 188,000 by 2026 and generate US$3.4 billion in annual satellite capacity revenues.
The growth will be driven from three main areas: mobile backhaul, trunking and IP content distribution. Mobile backhaul will generate the majority of the growth, driven by the transition to 4G services. After several years of drastic declines, Trunking has stabilized and new demand is being generated at competitive price levels. IP Content Distribution, already witnessing initial deployments, will potentially generate large opportunities, if the right conditions develop.
“2016 was an inflection year for backhaul. Lower capacity pricing, together with smart ground segment, unlocked tremendous opportunities. SATCOM won very large deals last year and more importantly is no longer perceived as a last-resort solution, but rather a key enabler for broadband networks,” said Lluc Palerm, NSR Senior Analyst and report author. New use cases are appearing, which generate demand not only in emerging countries, but also in developed economies. Beyond extending network coverage to remote locations, satellite is now used for network resiliency, traffic offload, network densification, sporadic traffic and first-responder networks.
The ground segment has a key role to play in unlocking this market. Bandwidth efficiency and cheap capacity is not enough, and platforms need to be able to optimize traffic to boost network utilization. Backhaul offers a tremendous opportunity for equipment vendors with $1.2 billion in 2016-2026 cumulative CPE revenues. Mobile Network Operators are also more willing to outsource network management creating opportunities for end-to-end integration of services.
5G is a major step forward in the telecom ecosystem, not only offering faster speeds, but proposing a big change on how networks are conceived. It comes with extreme technology requirements such as ultra-low latency or Gbps throughput that might seem unattainable for SATCOM. However, 5G opens extraordinary opportunities for SATCOM, if technology continues to progress. Ubiquity, resiliency, virtualization or edge capabilities are key attributes offering new opportunities.