Packet Microwave Forum: High Growth in Mobile Backhaul

Packet Microwave: the transition from TDM/Ethernet
Featured Correspondent: Siân Harris for Layer123

In 2015 the global microwave equipment sector’s revenue is expected to be $4 billion, according to a recent report by Infonetics Research. Although this figure will be a slight decline on today’s numbers – thanks to a combination of increased competition and the desire of operators to reduce costs – the most striking feature of the Microwave market predictions is the rapidly increasing dominance of Ethernet Microwave solutions. This is a market in rapid transition.

“The key long-term trend in Microwave is the shift from TDM-only equipment (PDH/SDH) to Ethernet-capable gear,” noted Richard Webb, directing analyst - microwave and small cells for Infonetics Research. He was speaking at Layer123’s first Packet Microwave conference, which was held in London in early October.

According to the Infonetics predictions, by the second quarter of 2011 Ethernet solutions already counted for 13% of the Microwave market, with dual TDM/Ethernet – or hybrid – equipment taking an 81% share. However, by 2015 the figure is expected to have increased to 63% for Ethernet, with the share for hybrid equipment correspondingly dropping to 36%.

The main reason for the increasing interest in Packet Microwave is in backhaul for mobile networks. Backhaul counts for more than three quarters of Microwave equipment revenue, with the remainder shared between access and transport.

“The dominant application is mobile backhaul and will still be for many years to come,” commented Dejan Bojic, senior product manager at NEC at the conference.

Andy Sutton, principal network architect at Everything Everywhere agreed: “If you look at a typical tower you get a sense of how important Microwave backhaul is to networks,” he observed.

Meeting customer needs

The dominant position that Microwave systems already play in network backhaul is a big driver for technical development. As mobile customers continually demand more data-rich services, along with highexpectations of quality of service, including low latency, operators are pushing towards LTE (long-term evolution) technologies and innovative network designs. And all of these place extra demands on the
capabilities of backhaul, driving the move towards Packet Microwave.

In addition, as Fredrik Davik, director, product management at Ceragon Networks, pointed out at the meeting, “Different applications have different requirements for quality of experience, bandwidth and delay.”

“The future will be very different in ways we don’t know or yet fully understand,” added Bojic of NEC. “Cloud services and applications need network infrastructure that is available, fast and reliable.”

This is no simple task. Future network infrastructure will need to support LTE/LTE-A and UMTS/HSPA/HSPA+, as well as retaining support for GSM/EDGE. What’s more, noted Everything Everywhere’s Sutton, some sites, especially in small cells, may need to support WiFi colocation.

And then there are the issues of operators sharing sites or backhaul capabilities and network topology issues such as chains of sites.

“Operators are upgrading their backhaul to accommodate HSPA growth and ensure LTE readiness,” noted Webb of Infonetics. “Because of 1Gbit+ capacity, Microwave continues to be a good fit for macro BTS backhaul.”

Microwave has some key benefits over optical fibre too, as several speakers at Packet Microwave pointed out. Bojic of NEC: “uniquely with Microwave, new greenfield capacity can be provisioned within days, not months – and when the link breaks down because of physical disruption, the recovery takes place in minutes, not days.”

Outdoor solutions

Nonetheless, there are still installation and maintenance issues to consider with Microwave, especially as operators desire to move to more outdoor solutions.

Michael Burch, senior designer at Everything Everywhere noted that: “There is still plenty of box swapping going on. How far can we go without changing the hardware?”

This issue was also raised by Ron Nadiv, VP R&D at Ceragon Networks in one of the conference panel discussions: “All the expenses relating to human costs don’t drop, so you don’t want to go to the tower too often!”

“To me, the key to reducing operating expenses is flexibility,” agreed Paolo Volpato, product strategy manager –wireless transmission for Alcatel-Lucent. “If you have to climb the tower to replace the ODU (outdoor unit) clearly it’s better to replace the IDU (indoor unit).”

These considerations will become increasingly important because the move to LTE networks is expected to be facilitated by the use of small cells in addition to the traditional macro cells. New pico cells with radii of around 200-300 m will typically be positioned at street level in busy, urban areas to provide increased capacity where it is most needed. Because there will be many more, smaller sites with these networks, costs become an increasing concern.

Installation and maintenance costs are also going to be key considerations for operators when it comes to small cells, according to Alan Solheim, VP of corporate development at DragonWave. “You can’t have multiple visits to a lamppost, especially when it might involve things such as stopping traffic. It needs to be one person doing one visit,” he said.

There is also plenty of ongoing debate on what technologies should be used in these small cells. Different technologies have different strengths and weaknesses, as various speakers illustrated, and vendors spoke about offering a range of solutions.

Spectrum requirements

One of the key factors to be considered is the availability of microwave spectrum. Infonetics Research’s recent study revealed a broad range of spectrum being used for backhaul, including an increase in use and planned use of the higher spectrum bands in the range 26.6-59.9 GHz and above.

“Where the industry needs to refocus is the cost of spectrum for highcapacity applications,” stated Bojic of NEC. “The cost of spectrum will be a very important consideration for small cells. Do we have enough spectrum of the right kind and at the right cost – and is the choice still fully licensed versus unlicensed?”

Burch of Everything Everywhere noted that operators have historically used licensed bands, which come with advantages but also requirements. For example, he pointed out that in the UK there are fixed receiver levels and restricted technical solutions that are part of the licence conditions.

Leo Macciota, senior marketing manager, network department for Huawei Technologies, commented: “I think regulators have to help us in building the right ecosystem. The best criterion is taking into account not just spectrum but also applications and not just channel spacing but also spectrum efficiency.”

The interest in spectrum availability at the conference was encouraging for Jean-Philippe Kermoal, an expert in spectrum engineering at the European Communications Office (ECO). He is chair of the SE19 Fixed Service Project Team, which is part of the Working Group Spectrum Engineering of CEPT (the European Conference of Postal and Telecommunications Administrations, which was established in 1959 and consists of 48 countries today). SE19 is currently presenting a report (ECC Report 173) on current use and future trends post 2011 of fixed services in Europe.

The report, which is available for industry comments until 20 January 2012, gives guidance for manufacturers and regulators on the European Fixed Service market and regulation and technology trends as well as an analysis of its current and future spectrum usage (including a frequency band-by-band review in Europe).

“Fixed Service has been in use for a long time in Europe and harmonising the spectrum in Europe is a continuous priority for the CEPT; it enables the resource to be used more efficiently and helps manufacturers to reduce costs. The latest work in SE19 has revealed strategic bands with rapid growth or recent take off. It’s important to make sure that future regulatory frameworks are suitable for the European market. Therefore the CEPT proactively responds to the industry demand for efficient usage with a set of new or revised
regulatory measures,” he explained.

“It’s good that people are mentioning the spectrum,” he continued. “My meetings are an open forum. ETSI members can automatically attend and others can come at my discretion so if people are concerned about spectrum they should come to the SE19 meetings.”


Related resources

The draft ECC Report 173 is available for comment at from 11 November 2011 until 20 January 2012, after which it will be reviewed for official publication.

Other regulatory ECC Decisions, ECC Recommendations or ECC Reports are publicly available at

SE19 meetings:






A new focus for innovation in the
Microwave industry

Layer123’s decision to launch a
conference dedicated to Packet
Microwave was greeted with
enthusiasm at the inaugural event in
London in October.

LTE pushes backhaul to small
cells and new spectrum

Key themes are the growth in
Ethernet microwave solutions and
technology developments to support
the higher capacity requirements of
evolving networks.

► Shift from TDM to Packet
Microwave is key long-term trend

Expected to grow from 13% (2011) of
the Microwave market to 63% (2015).

►Backhaul, LTE, QoS, Latency are
key drivers for Packet Microwave

Because of 1Gbit+ capacity,
Microwave continues to be a good fit
for macro BTS backhaul.

► Small cells increase focus on
installation & maintenance

The key to reducing operating
expenses when deploying small cells
and pico cells is flexibility.

►Cost of spectrum is an important
consideration for small cells
Regulators must help the industry in
building the right ecosystem and
focus on the cost of spectrum for
high-capacity applications.

Bojic of NEC:
“uniquely with
Microwave, new greenfield
capacity can be provisioned
within days, not months –
and when the link breaks
down because of physical
disruption, the recovery
takes place in minutes, not

Macciota of Huawei:

“…regulators have to help us
in building the right
ecosystem. The best
criterion is taking into
account not just spectrum
but also applications and not
just channel spacing but also
spectrum efficiency.”

Kermoal of CEPT: “SE19 is
currently presenting ECC
Report 173 on current use of
spectrum and future trends
post 2011 of fixed services in
Europe.. It is available for
industry comments until 20
January 2012.”



Robert Jones
Managing Director
T: +44 (0)20 8465 5440
Anthony Streeter    
Sales Director
M: +64 (0)226 543 812