NSR report: Smallcells a new key to unlocking $39 billion in satellite backhaul revenue

NSR’s Wireless Backhaul via Satellite, 14th Edition report, released today, forecasts $39 billion in 2019-2029 cumulative capacity revenues for Satellite Backhaul. With backhaul networks rapidly transitioning to 4G and the installed base continuously expanding, Mobile Backhaul via Satellite offers sizable opportunities in all regions. Smallcells will play an increasingly important role in this growth, as lower costs expand the addressable market to areas previously uncovered due to industry cost metrics. “With Smallcells, it is now possible to set up a Base Station with CAPEX under $20K. This translates into extraordinary new opportunities for satcom as MNOs can expand coverage into the most ultra-rural communities. Combining lower capacity prices, enhanced ground segment, and Smallcells, MNOs can now find positive returns even in these challenging deployments,” states Lluc Palerm, NSR Senior Analyst and report author. “Thousands of Smallcells are being deployed in Latin America and Africa alone.” The multiple M&As in the VSAT platform space are particularly relevant for the Backhaul market. The combination of Comtech/Gilat/UHP will create a very dominant actor in this market while iDirect/Newtec clearly sees Backhaul and 5G one of their primary growth engines. Additionally, as MNOs are increasingly willing to outsource network management, multiple groups are moving into offering end-to-end services, including new entrants like Towercos.

Demand for backhauling 5G networks will be modest in the first half of the decade. However, 5G is much more than just the next radio access technology; it represents a completely new way of conceiving networks and will have a transformative impact on the entire satellite value chain. Outside of Backhaul, Trunking is also turning around after a tough period with sky-high bandwidth requirements triggering upgrades on the ground segment and a recovery in capacity revenues. Multiple tests are underway for Hybrid networks, but concrete opportunities are still scarce. The period 2020-21 will be key in seeing whether this use case can really take off.

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