Small cell backhaul to contribute 25% of backhaul transport revenue by 2020

With wireless operators like Sprint (NYSE: S) and Verizon (NYSE: VZ) moving forward with their respective small cell plans, a new Dell'Oro Group report has forecast that small cell backhaul will contribute about 25 percent of mobile backhaul transport revenue by 2020.

The research firm said that the mobile backhaul transport market, comprising of wireless and fiber/copper backhaul systems, is forecast to grow $5.3 billion annually over the next five years. Further, microwave transmission radio transceivers, used in a number of applications including mobile radios, is forecast to grow at an average annual rate of 8 percent through 2020.

"While we do not envision topline market expansion in the next five years, we do believe a few dynamics are underway," said Jimmy Yu, Vice President at Dell'Oro Group., in a release. "Most notably, small cells have finally started to rollout, and though most are indoor units, we think operators will steadily raise deployments of outdoor small cells requiring additional backhaul links." Yu added that a near-term rise in wireless backhaul equipment will "energize" the microwave transmission equipment market. "Another dynamic underway is a slight mix shift to wireless backhaul from fiber/copper in the near term, which should propel microwave equipment purchases for the next three years," Yu said. Release