Backbone Network Services Market Is Expected To Be Strengthened By The Adoption Of 5G Network


Backbone network services help deliver reliable connectivity by facilitating data transmission between different networks and geographies. Backbone networks are the core infrastructure of telecommunication networks that form the central pathways for data traffic between various network edges. They enable seamless communication between enterprises, data centers, and consumer networks. The global backbone network services industry comprises internet, cloud infrastructure, content delivery networks, and various data centers that interconnect different subnetworks to facilitate data exchange at large distances and volumes. Major companies operating backbone networks lease out bandwidth and infrastructure to internet service providers, carriers, and enterprises.

The global backbone network services market is estimated to be valued at US$ 106.75 Mn in 2024 and is expected to exhibit a CAGR of 4.6% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.

The adoption of 5G network is expected to strengthen the backbone network services market. 5G network requires dense deployment of towers and small cell infrastructure to deliver ultra-low latency services for applications such as autonomous driving, telemedicine, and industrial IoT. This will generate significant data traffic that needs to be supported by robust and scalable backbone infrastructure.

Market Dynamics
The adoption of 5G network is expected to be the primary driver for the backbone network services market during the forecast period. 5G technology will facilitate applications such as video streaming, VR/AR, autonomous driving, telehealth, and smart infrastructure that generate massive volumes of data requiring high-speed connectivity between core and edge networks. Moreover, the increasing demand for cloud-based applications and content among consumers and enterprises is propelling the need for robust and flexible backbone networks with high bandwidth to support real-time data transmission over long distances. However, high initial investment and network maintenance cost associated with nationwide backbone infrastructure pose significant challenges for commercialization of 5G technology and large-scale adoption of bandwidth-intensive applications.

Segment Analysis

The backbone network services market share can be segmented into infrastructure services and professional services. Infrastructure services is the dominating sub segment and holds around 65% of the overall market share. This is because infrastructure is the core component for implementing any backbone network and requires regular maintenance and upgrades.

PEST Analysis

Political: stable regulatory environment and focus on developing digital infrastructure supports the growth of this market.

Economic: increasing demand for reliable and high speed network for data sharing & collaboration drives spending on backbone network services.

Social: higher internet & smartphone penetration is increasing dependence on network connectivity.

Technological: continuous advancements like 5G, edge computing, SDN & NFV are compelling enterprises to invest in high capacity and agile backbone networks.

Key Takeaways

The global backbone network services market is expected to witness high growth over the forecast period of 2024 to 2031. The global backbone network services market is estimated to be valued at US$ 106.75 Mn in 2024 and is expected to exhibit a CAGR of 4.6% over the forecast period 2024 to 2031.

Regional analysis:

North America holds the major share of around 35% owing to heavy investments by telecom companies in network infrastructure to support 5G rollouts.

Key players analysis:

Key players operating in the backbone network services market are AT&T Inc., Verizon Communications Inc., NTT Communications Corporation, GTT Communications and Telstra Corporation Limited. These companies are focusing on expansion of network coverage and enhancing capabilities to capture more revenue share.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it