Microwave transmission equipment market revenue rose 33 percent in Asia Pacific and 20 percent in the Middle East during the third quarter of 2014 indicating that telecoms are stepping up investment across the globe.
Strong demand for wireless backhaul has also prompted telecom markets such as Africa and Europe to enhance microwave use during the third quarter, offsetting declines in the Americas region, said Dell’Oro Group recently.
Another telecom analysis report says the microwave equipment market grew 4 percent sequentially and declined 2 percent from a year ago to $1.1 billion. The growth in backhaul was supported by the microwave market, while access and transport remain stable niche segments.
The EMEA region (Europe, the Middle East, and Africa) leads the world in microwave equipment revenue, followed by Asia Pacific.
Pricing pressure
Infonetics Research, a part of IHS, earlier said ARPU for Ethernet-only units, which account for an increasing proportion of shipments, will dip to around half its 2013 value by 2018.
Telecom network vendors such as Alcatel-Lucent, Ceragon, Ericsson, Huawei and NEC are some of the key players in the global microwave equipment market.
Despite pricing pressure, the microwave transmission equipment market is returning to growth.
India and the Middle East are just a few of these key microwave backhaul regions where further network spending has benefited the microwave market.
Jimmy Yu, vice president of Microwave Transmission research at Dell’Oro Group, said: “Point-to-point Microwave Transmission radio unit shipments are forecast to grow at an average annual rate of nearly 10 percent over the next five years, through 2018.”
Who’s spending on Microwave
One of the main demands of telecom operators is to preserve their investment in existing telecom infrastructure.
Some of the telecoms are investing in 100G network to upgrade their existing telecom network to meet customer expectations for ultra-broadband connectivity and high reliability.
MTN Nigeria
MTN Nigeria has tapped Alcatel-Lucent to deploy 100G networks that re-use existing 10G optical assets by preserving MTN’s past investments in telecom infrastructure.
“Our new solution will met three main criteria: increased network reliability, a high degree of scalability to prepare the network for 400G and beyond, and preservation of our existing 10G investment,” said Lynda Saint-Nwafor, CTO of MTN Nigeria.
Telefonica
Telecom operator Telefonica has selected Comsearch, a provider of wireless spectrum planning and analysis, for creating the best performing wireless networks through highly optimized microwave backhaul systems. Telefonica will use iQ.linkXG microwave backhaul planning tool from Comsearch, a CommScope company, to maximize investments in its wireless backhaul networks.
“Telefonica always chooses best-in-class solutions for its networks around the world, ensuring that our customers enjoy the best service levels possible,” said Juan Manuel Caro, director of Operations & OSS, Telefonica.
Ben Cardwell, senior vice president, Global Wireless Sales, CommScope, said that network design and optimization are so critical these days to ensuring that backhaul networks perform at the maximum level for supporting high speed communications.
Bell Mobility
Telecom operator Bell Mobility selected Ceragon Networks to deploy the first commercial 4×4 MIMO in Canada. Ceragon’s multi-core FibeAir IP-20C solution enables Bell Mobility to provide 1.6 Gbps of capacity over a single 40MHz channel. Ceragon’s microwave solutions will support Bell Mobility to more than double the capacity of its wireless backhaul network.
Ira Palti, president and CEO of Ceragon, said: “Our compact FibeAir IP-20C solution is capable of delivering multi gigabit capacities over a single licensed frequency channel. As such FibeAir IP-20C provides the flexibility that mobile carriers need in order to meet diverse deployment scenarios in both urban and rural settings.”
Approximately 30 percent of all Bell Mobility cell sites are connected to the network via microwave. The telecom operator did not opt for fiber in select parts because fiber is not always available or cost-effective, especially in rural parts of the country.
Bell Mobility, a leading telecom operator in Canada, is preparing their network to haul LTE Advanced and 5G future services. As new mobile technologies gain support and popularity, there is a need for an increase in backhaul capacity over microwave.
“Average household bandwidth requirements are poised to increase by 31 percent annually over the next five years — from a peak hour average usage per household of 2.9 Mbps in 2014 to 7.3 Mbps in 2018,” according to Ciena sponsored research conducted by ACG Research.
Bright future ahead
ABI Research earlier predicted that worldwide wireless operator Capex will increase 5.9 percent in 2014 to $185.5 billion. Telecoms in regions such as Latin America, Africa and Asia Pacific will invest in Capex.
Lian Jye Su, Research Associate of Core Forecasting, said: “Equipment spend on microwave backhaul and in-building wireless will increase by 40 percent and 14 percent respectively in 2014.”
Telecom operators will spend a cumulative $45 billion on macrocell mobile backhaul equipment over the 5 years from 2014 to 2018, said Infonetics.
Microwave will comprise 48 percent of mobile backhaul equipment spending in 2014 and trend downward slightly by 2018, in favor of wired solutions, predominantly fiber-based. The ongoing investment in HSPA/HSPA+ and growing LTE deployments are fueling Ethernet macrocell backhaul spending, especially microwave and Ethernet over fiber.
Packet microwave is forecast to record the highest growth rate among the microwave technology segments (TDM, hybrid, and packet) with unit shipments expected to grow at an average annual rate of 24 percent through 2018, said Dell’Oro Group.
Issues such as network consolidation and fiber expansion are expected to be permanent features of the market dynamics.
Europe and India, two of the largest regional markets for microwave mobile backhaul, will post better sales to become cornerstone of the microwave market.
Image source: Dhaka Tribune
Baburajan K
editor@telecomlead.com