Revenue gains in Ethernet and hybrid TDM/Ethernet microwave equipment sales failed to offset price erosion across most microwave market segments, leading to a thin 2.4% rise in the overall microwave equipment market in 2Q 2011, according to research firm Infonetics.
The total market reached $1.3 billion worldwide for the quarter, Infonetics Research said, with Ericsson and NEC the leaders by market share, and Huawei pushing into third place with a growth of 90% by revenue. All three are now separated by just one point market share, Infonetics said. The analyst attributed Huawei’s succes to “the considerable amount of higher-spectrum microwave gear they sell, particularly 23- and 38-GHz equipment, and to leveraging their contracts with their mobile RAN and optical equipment customers.”
Infonetics Research’s Microwave Equipment vendor market share and forecast report also found that:
• As carriers seek to accommodate traffic growth on their 3G networks and prepare for 4G/LTE service launches, the need for enhanced mobile backhaul bandwidth will continue to drive the Ethernet microwave equipment market
• In preparation for the expected need for denser on-the-street cell topologies in 4G networks, small cell backhaul solutions are already coming to the microwave equipment market, sporting all-outdoor ‘zero footprint’ lower power form factors
• Microwave equipment vendors are emphasizing new higher-capacity products, with several vendors now claiming 1G+ capacity links
• Between 2011 and 2012, global shipments of Ethernet microwave radio equipment are forecast to double, while TDM microwave gear will continue its inexorable decline, and the decline of hybrid TDM/Ethernet microwave gear will accelerate
• Revenue from Ethernet microwave equipment surpassed that of TDM microwave in 2010, and is expected to overtake hybrid TDM/Ethernet microwave equipment by 2014
• The sharpest growth in microwave equipment spending will come from North America between 2011 and 2015
• Equipment in the spectrum clusters 4-7.99GHz, 8-11.99GHz, and 12-17.99GHz accounted for 82% of microwave equipment revenue in CY10
Infonetics has also carried out a survey of 21 operators asking them about their deployment plans, feature preferences, ratings of vendors, and criteria for choosing vendors. Select excerpts from the report, Microwave Strategies and Vendor Leadership: Global Service Provider Survey, follow.
“The bottom-line result of our latest microwave strategies survey is that, for operators, customer support is the key way to differentiate from the pack. Technology is important, and of course vendors love to talk about new product features. But this does not always align with the way in which their customers and the market in general assess vendors. To operators, a vendor that can build a lasting and productive relationship with them, based on strong service and support, will most likely win the purchase decision,” advises Richard Webb, directing analyst for microwave at Infonetics Research.
Microwave survey highights
• NEC is the highest-rated vendor for customer service and support among operators participating in the survey
• Ericsson joint-leads with NEC in financial stability ratings, and ties Nokia Siemens Networks for the second-highest ratings for technology (NEC is first)
• Huawei gets top marks from operators for pricing and price-to-performance ratio, reinforcing the perception that it is undercutting the pricing structure of its competitors
• Alcatel-Lucent ties for the third-highest rankings from operators for a number of criteria, including product roadmap and security
• There will be an increasingly significant shift from dual Ethernet/TDM microwave to Ethernet-only microwave backhaul, driven by the exponential increases in data traffic caused by HSPA/HSPA+ and later, LTE adoption
• Microwave will continue to be the dominant mobile backhaul solution even as fiber to the cell site is more widely deployed, as fiber will not always be available or cost-effective
• Though mid-tier (13-24 GHz) and low-tier (1-12 GHz) spectrum bands currently dominate microwave deployments, use of high-tier spectrum (24-42 GHz), unlicensed spectrum, and millimeter wave spectrum will notably increase as operators seek to leverage less exploited spectrum to address backhaul needs