DragonWave cuts Clearwire strings with FiberTower microwave deal

For some time investors in microwave backhaul provider DragonWave have been jittery about the company's prospects since Clearwire slowed down its buildout of WiMAX. So it was a relief this week when DragonWave announced a deal with FiberTower, one of the largest alternative backhaul providers in the U.S., to provide high-capacity microwave solutions that will support FiberTower's microwave-based packet backhaul services.

FiberTower holds an extensive footprint in 24 GHz and 39 GHz radio spectrum bands, the former LMDS bands that were once used for fixed wireless services, and it uses fiber and microwave. The backhaul specialist will use DragonWave products to build out a higher-capacity, converged packet backbone for backhauling customer services. DragonWave products are installed in FiberTower's networks in Ohio and Texas.

"We believe FiberTower (a new incarnation of former LMDS access companies First Avenue Networks and Teligent) will likely spend 75 percent of its future backhaul spending on microwave (rather than fiber) and think the benefit to DragonWave could be more than $1 million per quarter in the future, providing a 5 percent to 10 percent boost to its non-Clearwire revenues," said Jefferies analyst Peter Misek in a research note.

In an interview with FierceBroadbandWireless, Alan Solheim, vice president of product management with DragonWave, said the company has been heavily focused on diversifying its business over the past year. Last summer, Clearwire accounted for about 85 percent of the company's business. Solheim also said the company's microwave products are increasingly being used as a way to extend the reach of fiber.

While FiberTower's model can support both fiber and microwave technology, the company said it has been seeing increased demand for Ethernet and 50 Mbps speeds. In addition, bandwidth forecasting at its sites has shown the company that it will need to increase the amount of fiber-fed sites it has.

FiberTower's expansion efforts come at a time when a number of emerging wholesale players (incumbent telcos, wireless backhaul specialists, cable operators, and even VNOs) are jockeying for competitive position to take advantage of how wireless carriers such as Verizon Wireless (NYSE:VZ) will ramp up their LTE deployments this year.

For more:
- see this release
- read this International Business Times article

Related articles:
FiberTower fills out its fiber footprint
Investors jittery over DragonWave's customer prospects
Clearwire-dependent DragonWave watches business erode 

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