The communications industry is certain 5G networks are going to need more backhaul. The question is, how much? CIR says $2 billion a year’s worth within five years, with half the annual total spent in the United States. The optical networking segment will be the main beneficiary, according to a new report from CIR.
CIR projected that Chinese service providers will spend more than $130 million on 5G backhaul in 2022. China will end up being the fastest-growing market for backhaul, CIR calculated, followed by South Korea.
The communications industry is relying increasingly on fiber-optic technology throughout networks, and the adoption of 5G, which requires higher speeds and lower latency, is only going to support that trend. Backhaul methods have always included both fiber and satellite channels, but CIR believes that fiber is going to be preferred going forward.
It appears to CIR that one particular configuration for backhaul is being favored.
“The technology that will dominate 5G backhaul will be NG-PON2,” CIR stated. “By 2022, more than $890 million will be spent on this technology for 5G backhaul."
The analyst firm noted that Verizon has selected NG-PON2 for 5G backhaul. Top vendors, including Cisco, Nokia, Huawei, Calix, Adtran, Ericsson and Alcatel-Lucent all have PON solutions for 5G backhaul.
NG-PON2 should remain the most popular technological choice, provided prices come down as expected, based on the development of less costly tunable components, CIR said. Most of the suppliers of those components will be based in China, the firm expects.
CIR also calculated that more than 170,000 fiber miles (280,000 kilometers) of cable is expected to be shipped for 5G backhaul applications in 2022, with major fiber and cable suppliers such as Corning already showing signs of specifically targeting 5G infrastructure with their products.
The firm also noted that the introduction of high-speed wireless may have the side effect of reducing the need for fiber to the premise/home (FTTP/FTTH).
There will be some short-term uncertainty until 5G standards are finally ratified, but CIR concluded that “5G is potentially a massive opportunity for the fiber optics industry, with this taken to include opportunities for the makers of modules and components as well as the fiber/cable manufacturers themselves.”