The demand for high-performance connectivity is reaching new highs in the 5G wireless era. Annual data traffic from the top 30 countries is forecast to grow from almost 1,100 exabytes in 2022 to over 4,000 exabytes in 2027 -- with 5G making up ~60 percent of total data traffic in 2027.
Based on the higher data throughput and lower latency required by 5G networks, backhaul or transport solutions must also adapt to meet the increased requirements needed by advanced cellular technology.
While fiber-optic links remain a preferred choice for 5G network backhaul, microwave technology is still seen as a key component in many 5G networks due to its lower deployment costs and ability to be deployed in areas where fiber deployment is difficult.
Wireless Backhaul Market Development
Additionally, wireless backhaul deployments can also be used to complement fiber backhaul deployments by providing increased resiliency.
According to the latest worldwide market study by ABI Research, the total number of cellular base stations -- including both macro and small cells -- using wireless backhaul links will increase from 6.3 million in 2022 to 7.6 million in 2027.
Base station links will reach a Compound Annual Growth Rate (CAGR) of 4 percent, with E-band growing rapidly from almost 400,000 links in 2022 to 2.5 million links in 2027, at a CAGR of 44 percent.
"Technological advances for microwave and Millimeter Wave (mmWave) solutions, such as Band and Carrier Aggregation (BCA), Cross Polarization Interference Cancelling (XPIC), adaptive modulation, antenna stabilization technology, and high-powered radios have led to increased link capacities and distances attainable by the various frequency bands, thereby making microwave and mmWave backhaul more viable options," said Matthias Foo, industry analyst at ABI Research.
A light licensing regime for E-band, implemented in several markets, has also lowered the costs for E-band, thus making the band an attractive option for standalone and multi-band system deployments.
There could be a gradual migration of existing backhaul links in the lower microwave band to higher frequency bands due to spectral congestion.
For example, there has been strong interest in the use of the 6 GHz band for unlicensed services, such as Wi-Fi, with countries like the United States and South Korea already adopting license-exempt access to the entire 6 GHz band.
At the upcoming World Radiocommunication Conference to be held between November and December 2023 (WRC-23), frequency bands 6.425 - 7.025 GHz, 7.025 - 7.125 GHz, and 10.0 - 10.5 GHz are also being considered for International Mobile Telecommunications (IMT).
Additionally, research into the use of even higher frequencies, such as the W-band and D-band, are already underway, with some companies also offering the use of Free Space Optics (FSO) communications and satellite 5G backhaul as alternate solutions.
Outlook for Wireless Backhaul Applications Growth
With the improving capabilities of various wireless backhaul technologies, there is strong growth potential for wireless backhaul industry. However, despite an overall positive outlook, challenges remain.
Macroeconomic factors, such as strong global headwinds, the continuing impact of the Russia-Ukraine conflict, the present global energy crisis, and chipset shortages, are expected to have some impact on the wireless backhaul industry.
That said, I anticipate microwave communications technology will continue to evolve. Moreover, market demand could help to reduce microwave radio unit costs, as the production of these new high-performance systems increase over time.