Mobile operators around the world are watching the exponential growth of mobile data usage that demands solutions and a corresponding need for mobile backhaul infrastructure. Usually, the time consuming installation of fiber and its higher cost within urban environments, render traditional fiber backhaul impractical in many cases. Therefore, microwave presents a compelling cost-effective alternative. This is noticeably evident in the developed mobile broadband markets of EMEA and APAC, where carrier competition and increasing bandwidth use are strategic drivers.
Despite the dominant role of traditional point-to-point microwave (PTP) today due to the advantages of performance and capacity, there are many other viable solutions available to support the small cells and access network. For example, millimeter wave equipment could also a good alternative in the near future by solving the backhaul challenge. All outdoor point-to-multipoint (PMP) radios with carrier-grade capabilities are also expected to become a key asset for backhaul links between lamp posts and the sides of buildings where small cells will be installed. In principle, the carrier grade links will allow small cells connectivity via only one-hop in the backhaul and also re-use existing infrastructure, for example connect directly to the point of presence (PoP). Regarding savings, PMP links promise significant OpEx and CapEx reduction over PTP when deployed in medium to short distances, below 2.5km. However, the business case for small cells has yet to be fully demonstrated.
In November 2011, one of the first wireless point-to-multipoint (PMP) backhaul equipment revenues’s report authored by Elias Aravantinos, sized the market at more than $1 billion by 2016, up from an estimated $200 million in 2011. The overall PMP wireless backhaul market growth will kick-start in late 2013, driven by the increasing number of commercial LTE deployments combined with the small cell market escalation.
Today, there is a high level of PMP testing activity from operators with several projects running worldwide, anticipating the PMP solution’s appeal and the small cells fit. Operators’ focus on backhaul is driven by their need to identify new solutions that add more capacity. One of the difficulties that vendors and operators need to overcome is to prove the PMP small cell business case which should be examined case by case. To that direction the spectrum license fees can make very significant savings, depending on the country, but also traffic type can affect aggregation efficiency (E1, Ethernet, Wi-Fi backhaul, etc). Furthermore, it is very important the ease to add new sites and the potential savings from reduced maintenance costs (less equipment and lower power consumption). In the cons, a potential item identified was that costs can vary significantly depending on the deployment scenario, green field or swap out. Overall, the operator was keen on the PMP technology, describing deployment and hardware challenges. Among the challenges which operators are facing is that All Outdoor/Zero footprint equipment is not always “Plug and Play.” That includes cases with only optical traffic connections and separate power cables supported with non-standard PoE or no lightning protection if directly connected.
In 2012, PMP vendors will continue improving products, testing and demos to prove the essence for more PMP links. More investment is expected to flow in order to accomplish that, but also new movers and shakers might arise driving strategic acquisitions. Competition will lead to higher microwave radio capacity, smaller footprints and efficient management capabilities that will become increasingly important in proving and winning large contracts with mobile operators–mainly in Africa, the Middle East and Latin America and even new markets such as Australia. Although PMP is not the dominant backhaul technology of today, it is expected to rise, playing an important role in the network in 2012 and beyond, supporting the evolution of small cells.