The New Wave of Mobile Backhaul
Specifically, operators will need a lot more capacity to handle data traffic, particularly when voice becomes packetized in future cellular networks. They need that extra capacity to be delivered in a way that scales as closely as possible with their revenues, and this has led to market growth in Ethernet-based backhaul and new interest in microwave systems from operators in North America where, traditionally, it has not been used.
The demand for capacity will be most acute in dense urban environments – for instance, from aggregation points handling traffic from multiple base stations, or as part of ring architectures closer to the network edge. Many vendors reckon that here operators may need links capable of delivering multi-gigabit capacity in the next couple of years, and that is why there has been interest in millimeter-wave equipment in the 60/70/80/90GHz wavebands, capable of delivering very high capacities over short distances. The opportunity may emerge first in European cities, where density is greater than in North America, operators are familiar with wireless backhaul technology, and spectrum costs associated with ramping up capacity of existing microwave backhaul by using additional channels may be significant.
But there are problems. The range of millimeter-wave equipment is very short – typically no more than three kilometers – and throughput can be seriously affected by rainfall. Furthermore, link prices are still high: There has not been a reduction of cost that comes with volume deployment. Even vendors admit there is significant work to be done to improve the proposition. The worry is that the technology will go the way of Free Space Optics (FSO), another short-range, high-capacity technology.
Despite this, there are indications that millimeter wave has a place in the backhaul toolkit. For instance, Alcatel-Lucent (NYSE: ALU) has recently announced a global resale agreement with leading millimeter-wave vendor BridgeWave Communications ; the Franco-U.S. equipment giant will provide BridgeWave's equipment as part of its 9500 series microwave backhaul solution. (See AlcaLu Enhances Microwave Backhaul.) And vendor GigaBeam Corp. (OTC: GGBM) reports trials of its kit with (non-U.S.) service providers, though it admits they are not spending yet.
The crucial equation is: Will real demand for millimeter wave's capacity emerge before the vendors run out of money? Even if there is ultimately a need for the technology, it is unlikely that all the current providers will make it.
The latest Unstrung Insider, "Microwave, Satellite & E-Band Backhaul: Growth Prospects" looks at recent technology developments in microwave, millimeter-wave, and satellite equipment with a focus on backhaul. It discusses the market opportunities for the technologies and shows how vendors are responding to specific customer needs, particularly in relation to increasing demand for cost-effective bandwidth and flexible deployment. The report compares the offerings of, and profiles, ten leading vendors from across the market.
— Danny Dicks, Contributing Analyst, Unstrung Insider
The report, Microwave, Satellite & E-Band Backhaul: Growth Prospects, is available as part of an annual subscription (12 monthly issues) to Unstrung Insider, priced at $1,595. Individual reports are available for $900. To subscribe, please visit: www.unstrung.com/insider.