The market for microwave equipment – time-division multiplexing (TDM), Ethernet, and dual Ethernet-TDM microwave equipment – contracted in 1Q 2014 as price pressures and competition from alternative network technologies, particularly fiber-based backhaul solutions, constrained growth, according to Infonetics Research’s latest quarterly report.
“The proliferation of LTE-A upgrades and small cells deployments was not enough to stop the microwave equipment market from sliding downward in the first quarter of 2014,” Infonetics’ directing analyst for mobile backhaul and small cells Richard Webb commented in a press release. “The seasonal decline was much more severe than usual, suggesting a deeper malaise in the market.”
Webb added that microwave backhaul may be at or reaching the limit of demand vis-a-vis increasing backhaul capacity from cell sites even with the introduction of wireless 5G broadband towards 2018. “Many will be more than adequately future-proofed by this point,” he noted.
Other highlights of Infonetics’ 1Q microwave equipment market report include:
- Microwave equipment revenue totaled $1 billion worldwide in 1Q14, down 17% sequentially, and down 7% from the year-ago quarter
- Revenue for every microwave product segment-TDM, dual Ethernet/TDM, Ethernet, access, backhaul, transport-declined in 1Q14 from 4Q13
- Backhaul continues to dominate the microwave market, while access and transport remain stable niche segments
- Ericsson held steady atop the microwave equipment revenue share leader board in 1Q14, while NEC leapfrogged Huawei to claim the #2 spot
- By 2018, the average revenue per unit (ARPU) for Ethernet-only microwave gear is anticipated to fall to around half its 2013 value.