Backbone network services form the communication infrastructure for effective exchange of data between users across various network segments. These services provide high-performance transmission capabilities through carrier-neutral facilities for bandwidth-intensive data and applications. They deliver transmission via fiber optic and microwave connections in a scalable, reliable, and secure manner. With the rising adoption of cloud computing, 5G deployment, and video streaming services amid remote working scenarios, the need for high-speed data transmission is growing exponentially.
The global Backbone Network Services Market is estimated to be valued at US$ 92.66 Bn in 2023 and is expected to exhibit a CAGR of 4.6% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
One of the key trends driving the growth of the backbone network services market is the increased demand for unified communications. With more companies adopting remote and hybrid working models, the need for robust and secure connectivity between dispersed workforces has increased significantly. Backbone network services facilitate unified communications solutions that allow seamless connectivity and collaboration through platforms like video conferencing, voice, and instant messaging. These solutions bridge geographical barriers and enable organizations to connect their employees virtually. As remote working arrangements become more permanent, the demand for scalable and reliable unified communications is expected to rise at a steady pace over the forecast period, driving the backbone network services market.
Segment Analysis
The global backbone network services market is dominated by IP transit subsegment. IP transit allows organisations to access the internet through third-party networks and services. It accounts for more than 40% of the total backbone network services market owing to the massive traffic of internet data across various sectors demanding reliable network connectivity solutions. With increasing digitisation and adoption of cloud, many companies are opting for IP transit services to transport traffic securely and seamlessly between their infrastructure and destinations globally.
Key Takeaways
The global backbone network services is expected to witness high growth. The market is projected to reach US$ 128.29 Bn by 2030 from US$ 92.66 Bn in 2023, expanding at a compound annual growth rate (CAGR) of 4.6% during the forecast period.
Regional analysis
The North American region currently holds the largest share of the overall backbone network services market size owing to rapid digital transformation and heavy investments in connectivity infrastructure by major players in the region. The region is expected to maintain its dominance during the forecast period on account of reliable and advanced network offerings by several tier 1 carriers to support growing data traffic in the US and Canada.
Key players related content
Key players operating in the backbone network services market are AT&T Inc., Verizon Communications Inc., NTT Communications Corporation, China Telecom Corporation Limited, Deutsche Telekom AG, British Telecommunications plc (BT), Orange S.A., Telefonica S.A., Sprint Corporation (now part of T-Mobile), CenturyLink (now rebranded as Lumen Technologies), Vodafone Group plc, SoftBank Group Corp., Level 3 Communications, Telstra Corporation Limited, Tata Communications Limited.
Some of the major strategies adopted by key players to gain competitive advantage in the market and strengthen their global presence include mergers and acquisitions, partnerships and collaboration. For instance, in 2021, AT&T partnered with IBM to develop an AI-powered network to support growing connectivity demands. Similarly, in 2022, Verizon acquired Tracfone to expand its consumer business segment.
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