As 5G deployments stall, Q2 revenues for microwave transmission equipment declined year-over-year for a fourth consecutive quarter according to Dell’Oro
The microwave transmission market declined 8% year-over-year in Q2 2024, driven by less demand for mobile backhaul, according to analysts Dell’Oro. Revenue associated with mobile backhaul also declined 9% year-over-year. The decline was especially strong in the Asia Pacific region.
The analysts went deeper to try to see if there were any signs of comfort, only to find that both the long haul and short haul markets declined in the quarter. The steepest rate of decline was in long haul due to limited demand for full indoor units (FIDUs). Dell’Oro estimates FIDU revenue declined nearly 40% in the quarter.
“The microwave transmission market started to trend downward a year ago in 2Q 2023,” said Dell’Oro Group vice president Jimmy Yu. “This downward trend is, for the most part, due to delays and slow starts in upgrading to 5G as operators in many parts of the world lack incentive to rapidly install a 5G networks.”
All regions declined on a year-over-year basis in the quarter with the exception of the Middle East and Latin America. The region with the steepest decline was Asia Pacific due to India. India revenue declined 40%.
Some vendors shine
Four vendors (Aviat, Ceragon, Huawei, and ZTE) still managed to increase their revenue in 2Q 2024 compared to the same period last year. Aviat’s growth was down to growth the addition of the Pasolink business and strong core revenues in Latin America and Asia Pacific regions.
Ceragon, which saw a slowdown in its North American market, bucked the trend in India, posting record quarterly revenues since Q2 2018, including revenue from a “new, top-tier customer”. The company put the growth down to a substantial ramp up in demand for its new IP-50CX product, with more than 20,000 radio units delivered. ZTE is still delivering across the Middle East and Africa, most recently with Orange in Liberia.
Meanwhile Huawei, which is bucking every trend, continues to innovate in microwave. In May, the Baotou Branch of China Unicom Inner Mongolia and Huawei completed what they claim was world’s first commercial test of the pioneering MAGICS LH long-haul microwave solution in Baotou, Inner Mongolia.
Using ultra-wideband technology, this microwave solution enables a single antenna to cover five frequency bands (L6 GHz, U6 GHz, 7 GHz, 8 GHz, and 11 GHz), making it the “widest range of microwave frequency bands ever recorded by a commercial product.” With a link capacity of up to 10Gbps, the solution can reduce microwave backhaul hardware costs by more than 70%, according to the vendor.
Duplex doubles the issue
Huawei’s latter point is part of the problem that revenues get impacted because technological innovation is also meaning fewer links are needed and in some cases, less kit is sold.
For example, in July, Nokia claimed it had achieved what was once thought impossible – the first-ever full duplex wireless transmission for fixed point-to-point links. This has been demonstrated in the D-Band spectrum (130 to 175GHz) with Nokia’s Wavence Ultra-Broadband Transceiver (UBT) radio, featuring fully in-house components.
The vendor said this pioneering technology allows for simultaneous transmission and reception of signals over a single channel, effectively doubling the capacity of a traditional FDD system. With this technology, Nokia demonstrated an impressive 10+10Gbps capacity – 10Gbps for the uplink and 10Gbps for the downlink – over a single 2GHz channel.
Nokia said full duplex technology not only enhances spectral efficiency by 100% compared to current systems but also offers significant advantages over line-of-sight MIMO, including – and here’s the rub – the fact that operators can expect to “see up to 50% less hardware required”. That will inevitably show itself on some vendor’s top line revenue in the future.