While the popularity of microwave transmission systems for mobile backhaul has declined over the years in favor of optical, Dell’Oro Group VP and analyst Jimmy Yu thinks there’s still room for microwave in the market.
A new report from Dell’Oro forecasts $17 billion in microwave transmission equipment will be needed over the next five years as 5G sites require better backhaul systems. According to Dell’Oro, mobile backhaul alone drives about 70% of the microwave transmission market’s revenues.
Microwave systems for backhaul can use most spectrum, anywhere from 4-5 GHz up to 80 GHz, but for 5G it's often microwave equipment that operates in the E-band, according to Yu, which is spectrum between 70 GHz and 80 GHz. While the five-year forecast for microwave transmission equipment is $1 billion less than the previous five years, the Dell’Oro report projects E-band system shipments to grow at a 36% compounded annual growth rate (CAGR) during the period.
Yu pointed to vendors like Nokia, who are putting out E-band microwave systems that can support 10-20 Gbps, which is enough for most 5G use-cases.
While fiber seems to be the gold-standard in the United States, Yu estimates 15-20% of cell sites in the U.S. still use microwave backhaul.
In countries like India it’s closer to 70-80% microwave, while in Europe it’s likely a close split slightly in favor of microwave, though operators in the region have been pushing in more fiber, according to Yu.
Fiber, while seen more as a future-proof technology that can handle massive capacity requirements, requires physical digging, which can be costly and time-consuming upfront. Microwave systems can be beneficial when geography isn’t favorable for a fiber dig, or it could be used as an interim technology.
“In some cases they might use microwave in the first two years as they’re trying to put in the fiber, which takes time,” Yu said.
There are some downsides to microwave transmission, it primarily requires line of sight, though there is a bit of freedom, and signal quality can diminish when there’s too much moisture or dust in the air.
Many have written off microwave transmission for 5G, with the expectation that next-generation technology will need enough capacity to deliver 20 Gbps per user. Yu thinks reality is going to be far from that, and “that’s why I believe microwave will continue to have a place in the market.”
If it were to happen that individuals were getting 20 Gbps, microwave systems would need to evolve to the next generation. Yu noted some are discussing the D-band, which is a far higher frequency range between 141 GHz and 175 GHz.
"We definitely see the advantage of employing fiber at all the cell sites for backhaul, but the reality is always different,” said Yu in a release. “Since fiber takes a long period of time to roll out at a very high expense, microwave transmission systems will always be a strong alternative. Besides the shorter time to install, microwave systems have additional benefits over fiber including lower latency and fast recovery from natural disasters.”