Worldwide revenues from backhaul leasing are expected to double over the next 30 months, according to a new study from ABI Research. The growth curve even accelerates after 2012, resulting in a fivefold revenue increase between 2009 and 2014. Why this powerful performance? According to ABI Research senior analyst Nadine Manjaro, the main driver is the effort by mobile operators to prepare for an upgrade to LTE. "Operators might not deploy LTE immediately," she says, "but they know that before they do, they'll have to upgrade their backhaul capacity."

Backhaul is the bottleneck that can prevent a satisfactory 3G user experience. "AT&T Mobility has found that one iPhone user typically generates as much data traffic as 30 basic feature phone users," notes Manjaro. Wireless network traffic will dramatically increase as iPhone-like devices become the norm and laptop PC card usage increases. Another indicator is the growing capital expenditure on microwave backhaul, which will exceed $8.5 B in 2009.

The market opportunities generated by this growth in backhaul are spread around the backhaul equipment vendors and fixed line operators. Some backhaul infrastructure vendors like Ericsson, Alcatel-Lucent and Nokia Siemens Network will benefit from operators' strong interest in Carrier Ethernet solutions. Major microwave equipment vendors like DragonWave and Harris Stratex will also benefit from increased microwave adoption. And fixed-line operators such as BT, Embarq, AT&T and Verizon Communications will develop new revenue streams by providing leased backhaul services.

Even the business models for backhaul are in flux. "We have observed a movement towards backhaul as a managed service," says Manjaro. "This enables mobile operators to focus on their core business, while guaranteeing a backhaul capacity matched to their changing traffic demands. BT provides that service to four of the top five European operators. In the US, Embarq is moving in the same direction, and I think more cable companies will follow suit. Wireline operators, who typically were losing business to wireless operators, can now get a piece of that wireless pie."

ABI Research's new study, "Mobile Backhaul-Global Market Analysis and Forecast," provides a comprehensive analysis of the global mobile backhaul market, including forecasts by region and technology. It is part of the firm's Mobile Networks Research Service.

ABI Research provides in depth analysis and quantitative forecasting of emerging trends in global connectivity.