The global mobile fronthaul equipment market is forecast to grow at a CAGR of 26.4 percent from 2017 to 2021, when it will reach $2.5 billion, according to IHS Markit's
Wavelength-division multiplexing (WDM) equipment dominates and will continue to do so; millimeter wave (mmW) entered the mobile fronthaul market in 2017 and is anticipated to comprise 12 percent of overall revenue by 2021.
Deploying remote radio heads as part of a centralized radio access network (RAN) or cloud RAN (C-RAN) architecture is driven by the need for higher capacity, denser connectivity and sectorization in the mobile network. Fronthaul has a fundamental role in a C-RAN, but its vital to understand the challenges to and options for its deployment.
To date, the mobile fronthaul equipment market has remained modest in size, with very little shipment data reported by vendors — a clear indication that the market has yet to fully take off. Deployments thus far have been hamstrung by high costs, scalability complexities and fronthaul performance concerns.
In 2016, global mobile fronthaul equipment revenue totaled $787 million, growing 56 percent over the prior year. Wireline made up the entirety of the mobile fronthaul market in 2016 — but millimeter wave entered the market in 2017 and will comprise 3 percent of total revenue. Millimeter wave is anticipated to grow to 12 percent of revenue by 2021, mostly utilized in small cell-like deployments.
Passive WDM accounted for 21 percent of wireline revenue share in 2016, with active holding the remaining 79 percent. By 2021, however, passive WDM is expected to hold just 7 percent of wireline revenue, with active WDM making up 93 percent. Within the passive WDM category, passive optical network (PON) equipment may come into play as the fronthaul market evolves.
In terms of regional share, Asia Pacific held the majority of mobile fronthaul revenue with 82 percent, followed by North America, EMEA (Europe, Middle East, and Africa) and CALA (Caribbean and Latin America).
The first trials of mobile fronthaul in live operator networks date back to 2013, and due to the complexity of the overall centralized RAN (C-RAN) architecture that mobile fronthaul supports, it will take a long time for mobile fronthaul technologies to become mainstream.
Nevertheless, 2016 saw several commercial deployments and a number of trials continuing ahead of an expected larger ramp of deployments from 2017 onward.