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Sunday, January 6, 2013

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

Mobile operators continue to invest heavily in LTE networks during 2012 and towards 2013 offering more capacity to their 3G subscribers, very often they face the difficult task of choosing solutions that will allow them to seamlessly maintain their businesses during the transition to pure packet networks. The several microwave solutions are a good and cost effective option. These solutions across different frequencies and architectures are 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 has been a very dynamic year, with lots of competition among vendors, where operators are as always  in the driver’s seat evaluating and maintaining two or even more microwave suppliers in quiet aggressive agreements. Lots of reforming and new products anticipating either an aggressive small cells evolution or faster LTE networks deployment. Overall it’s been a flat year (2012) with a small increase in the basket of shipped links or contracts for most microwave suppliers when other especially the exclusive E-Band suppliers managed to sustain business.

2012 microwave market review
Although it’s really hard to accomplish this task of what was really important, product trends and M&A are always hot stuff to report from an analyst’s perspective.  Some of the 2012 highlights are summarized in the following bullets:

·    2012 was another year, where need for capacity was so intensively discussed once more from LTE operators and vendors, targeting LTE-proven microwave backhaul solutions

·         Lots of discussions on small cells and need for ‘toolbox’ with different technologies as there is no technology that fits all
·         Small cells seem to gain lots of interest in the majority of vendors, as new products and mockups arise, targeting small form factors and following closely NGMN forum (Next Generation Mobile Networks) guidelines
·         Lots of solutions and competition across E-Band and V-Band, plus many RFPs that seemed to have closed end of the year 2012. Huawei presents its own E-Band solution
·         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 though a strong ICT solutions supplier competing with high end consulting groups such as BCG and Mckinsey in delivering high end solutions
·         NEC is pushing to higher modulations reaching 2048 QAM, 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 back in 2006
·         Telef√≥nica Selects Ceragon as a Strategic Global Microwave Partner
·         Cambridge Broadband Networks multipoint microwave equipment backhauls O2's outdoor metro Wi-Fi for the Olympics in the UK
·         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 actually the best radio architecture for LTE backhaul.
·         Indoor equipment still provides easiest maintenance, the lowest-cost upgrades and most likely the lowest TCO in LTE applications.
·          Zero-footprint microwave, low powered (5-10Watts) radios become mainstream
·         Lots of pressures on chipset prices and features that tend to cover full outdoor products
·         The role of MPLS is still questioned as a backhaul network’s extension
·         2012 market size is estimated between $4-5B mainly from backhaul and access services

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

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