The arrival of technologies such as 3G cellular, HSDA and EV-DO has caused mobile operators around the world to examine different ways to strengthen their backhaul in a cost-effective manner. Recently, Global Technology Editor John C. Tanner led a roundtable of leading industry executives sponsored by microwave antenna company Radio Waves that explored the expanding role of microwave technology in 3G infrastructure and examined how 3G backhaul can scale to meet the future demands as the mobile industry moves to 4G and beyond. Excerpts from the roundtable discussion follow:
John Tanner: It seems things are looking good for microwave but yet it's a very challenging market. Is that because it's very competitive or is it because of the price points‾
Dick Carter: I would guess it is a combination of both things. Anybody who's in the industry would realize that the number of competitors that are out here today, compared with the number operating in the marketplace five or six years ago, has increased significantly.
So, of course, with any increase in competition there is a natural progression downward in price. And I guess the other part that comes into that is as the number of operators around the world increases and the services provided by operators increases, there is more demand for the supply of this equipment. So that again brings problems to the manufacturers' side because as demand increases, people's expectation on delivery cycles also shortens, so people want more equipment in less time.
As microwave is a mature technology and practically a commodity business, how do manufacturers differentiate themselves‾
Andy Singer: There are numerous things that can differentiate manufacturers. For instance, delivery is a key issue, and when you're out there and rolling out a network sometimes there can be very tight project schedules.
Dick Carter: This is a discussion I often have with people who are buying microwave radio. In the operator's mind there is the perception about quick delivery - 'I want quick delivery.' When you really speak to people and you really dig down to find out what they really want, most of the time what people really want is not quick delivery. What lets a lot of operators down is the reliability of the delivery on time. It's not the absolute timeframe that people are concerned about.
What is it that the operators look for when selecting microwave equipment‾
Winston Tan: To us, the key issue is reliability and also the new developments in the microwave field, because I feel that microwave is getting to be more of a commitment. I foresee that pricing of microwave will continue to go down, and for you to compete on that, I don't think it'll be very attractive. I believe you might want to continue looking at the new development of microwave technology.
Ong Kok Ching: Basically, when we look at microwave, we look at the whole system, the solution, be it the antenna, the IDU, the ODU, the multiplexers and all that. So we look at everything. And what we naturally specify will be things like the reliability.
How many 9s can you get‾
We look at things like how frequency is used, how much spectrum is needed to cover a certain area. So the main criteria will be the distance and the reliability. What kind of features are there that will be able to support us in our network rollout‾ For example, capacity of the link. How many E1 ports are there or if there are any IP ports, how many are there‾
As operators add more access services, like Wi-Fi or WiMAX, will their backhaul networks merge as well or do they have to remain separate‾
Ong Kok Ching: If operators have a large market segment, then they would already have a few platforms: ATM, TDM, IP. For them to kill the legacy networks and say that you only have this as a single platform doesn't seem likely. For us, because we are a cellular company, we are looking into the possibility of having everything in a single platform. But right now we are still largely using NG-SDH.
Dick Carter: You've just made the comment that you are a voice GSM telephone company, and I think there is a very important distinction to make between the two types of operators that are starting to exist now and will exist in the future. And that is there are cellular companies that provide data services, and there are data companies that provide cellular services. And the basic philosophy of transmission between those two models today is very different.
Microwave radio can obviously handle the capacity right now, but how will it evolve to be able to meet demands over the next five to ten years‾
Dick Carter: People are now buying SDH radios. One of the reasons the cost has been reduced so dramatically over the last several years is because the uptake and the production volumes have increased dramatically.
I've heard a lot of people talking about the subject of how do we squeeze in more bandwidth. There are physical limitations on that. The laws of physics cannot be changed, and that's one of the reasons early on that as data services explode and the backhaul capacity increases, there will necessarily have to be more efficient means of compressing data that will be required. Both halves of the industry have to work together there. So, yes, there is a requirement for more data capacity in microwave radios.
Comparing satellite with microwave, microwave is good for wireless connectivity, you don't have to worry about fiber, you don't have to land acquisitions, and satellite has some of the same value propositions as well. So what are you telling your customers if they say, okay I'll go with satellite rather than go with microwave‾
Winston Tan: When we propose a solution and the locations are further than 20 to 40 km, you may need satellite. So at end of the day you still need a platform to the last mile. It's a complementary solution I would say.
Dick Carter: I've not yet come across one application where satellite technology competes with microwave technology as to which is the best solution. The application and the geography very clearly dictate one or the other.
A classic example is offshore drilling rigs. If a drilling rig is 65 to 70 km off shore, that is a satellite application. You can never deliver the required bandwidth to that site via microwave radio. So it's a satellite job. By the same token, if you've got a rig that's only sitting 7 or 8 km off shore, nobody would ever install satellite, it's microwave.
An Ericsson official suggested recently that as operators increase the capacity of backhaul for 3G, one of the potential business opportunities was a wholesale opportunity where you sell excess backhaul capacity to enterprises or other service providers. Is this feasible‾
Dick Carter: In the States, there is a company called FiberTower, and they were so successful, they were acquired. They took that concept to the next level. They are not an operator, but they went out and they targeted certain cities in the US and they built a microwave platform network and became a carrier's carrier. And they lease capacity on the microwave network to cellular operators in the US, and there were operators that gladly gave them the keys. 'Yeah. We'll do that. That's great!' These guys have actually made a business model out of that concept.
Would any of the operators here have any interest in wholesale backhaul‾
Yap Sheng Young: Definitely. Microwave network provision has capacity, and that capacity definitely can be utilized to support some other additions to your own network. I tend to agree with what you're saying, but the question is whether it would be more incidental to your own requirements. The way I see it, it really varies from operator to operator and also country to country, because different countries have different requirements and the competition is different.
Ong Kok Ching: If there's a carrier's carrier in Singapore, I'll certainly welcome it. But if someone is going to be a carrier's carrier, the quality has to be good for the carrier to sell services to their customers.
Andy Singer: I'll tell you, it's worked out well for us because the carrier's carrier is very concerned about quality and has no reluctance whatsoever to pay a little more for that quality product, so because of where we're positioned in the marketplace, its great for us.