Worldwide sales of service provider router systems will exceed $75 billion during the five-year period of 2020-2024, with 5G and cloud service trends expected to drive investments in IP network infrastructure, according to a new report from Dell'Oro Group.

As 5G service uptake grows, the need for backhaul capacity to support burgeoning data, video and cloud-related traffic over service provider networks cannot be overstated -- network operators cannot afford data traffic bottlenecks between their edge/aggregation nodes and their metro transport networks.

And the ever-growing demand for bandwidth-hungry services, driven largely by the need to connect to data center sites (whether centralized or distributed) will fuel upgrades to backbone networks involving investments in 400 Gigabit Ethernet (GE) technology, which is now coming to the market in a significant way: Indeed only today wholesale network operator giant Telia Carrier announced a major 400GE upgrade based on the latest Cisco router platforms.

Indeed, Dell'Oro predicts that revenue from 100GE and 400GE technologies will account for almost half of router revenue by 2024.

Shin Umeda, vice president at the analyst firm, said the overall service provider router market is expected to grow at modest, low single-digit rates during the next five years, "but there are network use cases such as mobile backhaul and backbone transport that will surge due to the uptake of 5G and cloud services, respectively."

Umeda added that vendors with the appropriate hardware and software solutions will benefit from the growth opportunities, but noted that geographic presence "will also play a big part in a company's success." For example, the Asia-Pacific region, led by China, is expected to produce the highest growth during the next five years.

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— Anne Morris, Contributing Editor, Light Reading