With the division of whether to use optical fiber or microwave for mobile backhaul, CAPEX for microwave backhaul will peak in Western Europe this year at almost $4.4 billion, more than triple the figure for the next-highest region, Asia-Pacific, according to ABI Research. The European spending surge is due to the expansion of 3G networks to new areas, as well as a few initial 4G network deployments.
“Once that wave is completed in Western Europe, microwave backhaul will be left alone for a while,” comments ABI Research analyst Xavier Ortiz. “Following the 2010 spending spree, Western European microwave backhaul CAPEX will tumble in 2011 to just over half its peak level.”
Virtually all world regions will see some increase in microwave backhaul CAPEX over 2011-2013, followed by a gradual decline, says ABI, with the reasons varying by location. In Asia, many 3G networks will be rolled out during that period, and others will be expanded to reach remote, underserved areas and, according to practice director Aditya Kaul, “Asia’s investment in microwave backhaul would be even greater were it not for the Chinese government’s mandate to use fiber for the country’s 3G and 4G networks. Although microwave is less expensive and faster to deploy, a governmental commitment to fiber means huge economies of scale, and fewer worries about zoning permissions.”
In the United States, the situation is said to be very different. The prevalence of fiber optic cable in many parts of the country combined with the high cost of tower leasing mean that interest in microwave as a backhaul solution is lower than anywhere else. “Large service providers are saying they will only use microwave where fiber is unavailable,” says Ortiz.