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ARTICLE
By Earl Lum, EJL Wireless Research LLC and Partner of Maravedis
For those who have been involved in the point to point (PTP) radio backhaul industry, times have changed significantly since the burst of the Telecom bubble in 2001. The promise back then was that 3G would bring tremendous demand for PTP radios as bandwidth requirements were expected to exponentially increase, due to 3G multimedia services. It is now six years later, and 3G is finally beginning to happen but growth remains constrained by business models that are still searching for another killer application besides voice. Will it be mobile TV? PTP radio OEMs are certainly hoping that to be the case or anything that drives demand for capacity or new network deployments. A significant amount of mobile networks have deployed 3G technologies globally and many WCDMA networks have already upgraded to Phase 1 of HSDPA (1.8Mbps). There are also some networks already deploying Phase 2 HSDPA with 3.6Mbps peak data rates. Data cards from OEMs are already touting Phase 3 “ready” capability with peak data rates of 7.2Mbps. CDMA EVDO networks globally are upgrading to Rev A currently, offering 3.1Mbps peak data rates and 4G OFDM network technologies such as WiMAX and LTE. These new technologies offer the promise of even higher data rates and increase the strain on the interconnections with between network elements of the RAN and the core. A decade ago, a BTS typically required a 2 or 4xT1/E1 connection to backhaul voice traffic to the BSC. Today, many mobile operators are provisioning a minimum of 16xT1/E1s as a mobile site now contains both a 2G BTS cabinet and a 3G BTS cabinet co-located. Evolutionary changes in the mobile network architecture may drive the eventual need for gigabit capacity for Node B backhaul. The promise of an all-IP network is still evolving as virtually all PTP radios today have Ethernet interfaces available as an option, yet demand for T1/E1 equivalent lines continue to grow at a rapid pace. Modulation schemes continue to advance because frequency spectrum remains a precious resource globally. Pricing continues to fall, in some cases, to absurd levels and strains the long term profitability of the entire global PTP radio ecosystem yet new OEM players continue to enter in search of a niche area to grow and expand, while some existing OEMs exit. In analyzing the entire PTP radio ecosystem from system level OEMs to MMIC suppliers, the industry is shaped like an inverted triangle with all radio OEMs dependent on a few key suppliers of the semiconductor technology that enables the entire industry to exist. As RF hardware differentiation morphs into the gray cloud of commoditization, software capabilities for modems and network management are beginning to separate the players in the market. Radio transport capacity continues to grow to gigabit data rates, and operating frequencies now extend to E Band, pushing the technology and creating new applications. Unit volumes continue to hit record levels each year as the long term ROI for using PTP radio technology has easily surpassed leased lines and fiber. The PTP radio market is not or weak players as competition to stay alive is fierce and unforgiving. Darwin’s Law of Natural Selection continues to dictate who the long term survivors and winners of this market may be. Yes, the PTP radio market today is exciting, thriving and growing. It continues to offer challenges to the industry in manufacturing capacity, scalability and profitability. For more information on the upcoming release of our latest market analysis of this industry, please visit our website at www.ejlwireless.com. For more information you can contact the author. elum@ejlwireless.com
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