Mobile backhaul equipment spending increased 21% in 2009, to $7.2 billion worldwide, reports Infonetics Research, who add that the mobile backhaul equipment market should grow to $10.4 billion by 2014.

"We have seen a wholesale shift in backhaul strategies as operators try to reduce the costs associated with skyrocketing mobile data traffic. Six months ago when we surveyed operators around the world, most were taking a dual/hybrid backhaul approach (TDM plus IP/Ethernet). Just last month when we repeated the survey, most operators told us they plan to use a single IP/Ethernet backhaul, whether over microwave, fiber, or copper. Mobile operators and transport providers now trust IP/Ethernet to do the whole job, including the tricky timing and synchronization required for most of the world's mobile networks. We declared 2009 the Year of IP/Ethernet Backhaul, and we see no slowdown in the mobile backhaul equipment market," explains Michael Howard, principal analyst and co-founder of Infonetics Research.

Ericsson continues to lead the mobile backhaul microwave radio equipment segment, with 20% worldwide revenue market share in 2009, with several vendors close behind. Tellabs however leads the combined Ethernet cell site equipment segment (routers and gateways); major changes in market leadership are expected in the future as the market matures.

Microwave mobile backhaul equipment, both TDM-based and Ethernet and dual Ethernet/TDM-based, made up 81% of all mobile backhaul equipment sales in 2009, with the dual and pure Ethernet microwave equipment revenue increasing rapidly. Ethernet cell site router revenue jumped 136% in 2009, nearly doubling its share of worldwide mobile backhaul equipment spending.

Richard Webb, directing analyst for microwave at Infonetics Research and a contributor to the mobile backhaul report, adds: "With operators increasingly recognizing Ethernet-based solutions as the best available means of accommodating backhaul traffic growth, and with microwave products now achieving 1Gbps in some scenarios, the Ethernet-only microwave segment is poised for rapid growth over the next few years, out-performing hybrid TDM/Ethernet solutions."

Infonetics expects almost 1.5 billion new mobile subscribers and about 1.2 billion new mobile broadband subscribers between 2010 and 2014, which will require more base stations, more cell site connections, higher backhaul capacities, and equipment for each cell site connection. Asia Pacific leads in mobile backhaul equipment revenue growth due to more users, led by China and India, and higher bandwidth per user in other countries