Blog Post

Mobile Backhaul Equals Big Money Opportunity

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

As noted earlier, wireless industry experts believe that mobile backhaul networks represent a big opportunity, mostly because of the proliferation of 3G and 4G networks and the easy availablity of iPhone-type devices is going to boost mobile data and video use.

Infonetics Research has issued a report that forecasts 4.4 billion mobile subscribers worldwide by 2011, and estimates that their needs will push the demand for wireless backhaul equipment to over $10 billion by that year. Infonetics predicts that the big spending is going to happen on the IP/Ethernet portion of worldwide mobile backhaul equipment with triple-digit growth rates predicted from 2007 to 2011. No surprise: T-Mobile, Swisscom Mobile and Telecom Italia are all building IP/Ethernet based backhaul networks. Ironically, given the amount of money being spent on this sector there isn’t much startup activity in this space.

16 Responses to “Mobile Backhaul Equals Big Money Opportunity”

  1. Frank Miller

    Why is it suprising that there is no startup activity? When was the last time you saw an infrastructure startup be acquired for more than the investment put into it? The big telcos are not acquiring startups, so the VCs are not putting money into them. That coupled with the fact that mobile backhaul isn’t really that much different than other backhauls means two things. First, the service providers are going to have to choose from existing equipment for the forseeable future and second, in a few years, the big telcos are going to be screaming for new technology. It won’t be there.

    In my opinion, the root cause of this falls on the service providers. Having been through infrastructure equipment startups, I can tell you that the price pressure exerted by the service providers on big equipment vendors which then trickles down to the startups makes doing infrastructure equipment startups nonviable. The result is easily predictable, glacial progression in infrastructure technology developments, since the big guys are the only ones that can afford it and they just don’t take chances.