An “all built-in” 2012 presented flat growth for the microwave industry

January 6th, 2013 by Elias Aravantinos

Mobile operators have invested heavily in LTE networks during 2012 and are expected to continue during 2013 for offering more capacity to their 3G subscribers. It is very often that they face the difficult task of choosing technologies that will allow them to seamlessly maintain an uninterrupted business during the transition to pure packet networks. Quite a few microwave solutions are a good and cost effective option, ranging across different frequencies and architectures and able to maintain enough capacity to ensure superb Quality of Experience (QoE) for end users as the demand for data consumption continues to grow.

2012 was a very dynamic year, with fierce competition between microwave equipment vendors. Operators are – as always – in the driver’s seat, evaluating and maintaining two or even more microwave suppliers in quiet aggressive agreements. A lot of reforming and new products are expected as an aggressive evolution to small cells or faster LTE network deployments are anticipated. Overall it has been a flat year (2012) in terms of shipments with a small increase in the basket of shipped links or contracts for most microwave suppliers. The exception is exclusive E-Band suppliers, who managed to sustain business.

2012 Microwave Industry review

  • 2012 was yet another year, when the need for capacity was so intensively discussed by LTE operators and infrastructure vendors. Discussions targeted LTE-proven microwave backhaul solutions
  • Small cell backhaul was also intensely discussed and the need for ‘a toolbox’ with different technologies as there is no technology that fits all
  • Small cells seem to have gained vendor interest, as new products and demos start to appear, targeting small form factors and following closely NGMN forum (Next Generation Mobile Networks) guidelines
  • Many solutions and fierce competition across E-Band and V-Band, plus many RFPs that seemed to have closed end of the year 2012. Huawei presented its own E-Band solution during 2012
  • Huawei closes the gap to Ericsson’s #1 ICT supplier, awaiting 2012 total revenues from both vendors.
  • Ericsson maintains its #1 position in the microwave industry, becoming a strong ICT solutions supplier competing with high end consulting groups such as BCG and Mckinsey in delivering integrated solutions
  • NEC is pushing to higher modulations reaching 2048QAM, expecting others to follow
  • DragonWave closes the acquisition of Nokia Siemens Networks and  is now the preferred strategic supplier of packet microwave and related products to Nokia Siemens Networks
  • Russian JSC Sitronics agrees to acquire the rest 49% of Intracom Telecom, gaining full ownership as was planned during 2006
  • Telefónica Selects Ceragon as a Strategic Global Microwave Partner
  • Cambridge Broadband Networks multipoint microwave equipment backhauls O2′s outdoor metro Wi-Fi in London during summer 2012
  • Some startups with innovative solutions, such as Bluwan and its Fibre Through The Air (FTTA) Access solution managed to win serious business in Africa with great potential providing broadband access to African cities
  • It is not clear yet if all-indoor or full-outdoor is the best radio architecture for LTE backhaul.
  • Indoor equipment still provides easiest maintenance, lowest-cost upgrades and most likely the lowest TCO in LTE applications.
  • Zero-footprint microwave, low powered (5-10W) radios become mainstream
  • Increasing pressure on chipset prices and features that tend to cover fully outdoor products
  • The role of MPLS is still questioned as a backhaul network’s extension
  • 2012 market size is estimated in the range of $4-5B, primarily driven by backhaul and access services

Upcoming article: “2013 microwave market trends and predictions from a backhaul perspective”

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