IHS Markit: Microwave Network Equipment Market -1%; YoY; 5G to Boost Growth

By Richard Webb, associate director of research and analysis, service provider technology, IHS Markit


  • The total worldwide microwave network equipment market declined by 5 percent quarter over quarter – and by 1 percent year over year – in the second quarter of 2018 (Q2 2018), falling to $1.03 billion.
  • Revenue in the second quarter was comprised of 80 percent backhaul, 7 percent transport and 13 percent access. Also within revenue, 16 percent was dual Ethernet/TDM, 71 percent was Ethernet only, 2 percent was V-band millimeter wave and 11 percent was E-band millimeter wave.
  • Regionally, 10 percent of revenue in the second quarter came from North America, 39 percent from Europe, Middle East and Africa (EMEA), 37 percent from Asia Pacific, and 13 percent from Caribbean and Latin America (CALA).
  • Ericsson (see Addendum) led the microwave network equipment market share ranking with 21.6 percent of revenue, followed by Huawei at 18.6 percent, Nokia at 12.5 percent, NEC at 10.6 percent, Ceragon at 8.5 percent, Aviat Networks at 4.2 percent, SIAE at 4 percent and ZTE at 3.8 percent.

IHS Markit Analysis:

Microwave equipment market declines in the second quarter of 2018 followed a stronger-than-expected first quarter, with second half of the year expected to be flat-to-slightly up.

Aside from performance by individual vendors, the market has been slow over the last two years. Mobile operators are typically cash conservative, and many operators in developed markets have undergone most of their backhaul upgrades for LTE. Although upgrades for LTE-A and LTE-Pro (and late-phase LTE deployment in developing regions) prop up the market, the early shoots of growth driven by 5G are now visible and will gain momentum over the next two to three years.

In the long term, the market will get an injection from 5G upgrades, driven by demand for higher-capacity backhaul combined with growing traction for outdoor small cell deployments. Although market growth will be muted in the short term, these drivers will push the market back to revenue growth in 2019 and beyond.

The effect of 5G on the microwave equipment market will be mainly felt in two ways:

  • Backhaul and fronthaul for mobile broadband: Increased capacity requirements for macrocells and small cells or remote radio heads to deliver high-speed mobile broadband connectivity.
  • Fixed-wireless access: In-home broadband for consumers, utilizing millimeter wave as a wireline (DSL/cable/fiber) equivalent, to deliver high-speed fixed broadband connectivity.

SDN, NFV and network slicing will impact transport networks over the next few years. Although they will make backhaul more flexible, they do not reduce the need for equipment at the endpoint of the backhaul link. However, the fact that SDN enables coordination between the radio access network (RAN) and backhaul network to optimize traffic and allocated network resources, is likely to strengthen the opportunity for microwave vendors with RAN portfolios to increase market share. Over the past few years, the market has been experiencing some consolidation among microwave-only specialists.

Microwave Network Equipment Quarterly Market Tracker:

The “Microwave Network Equipment Market Tracker” examines the vendors, markets and trends related to wireless radio equipment that uses microwave to transmit digital or analog signals between two locations on a radio path. The report tracks Ethernet, TDM microwave, Dual Ethernet/TDM microwave, and V-Band and E-Band millimeter wave equipment by spectrum, capacity, form factor, architecture and line of sight.



Ericsson’s Microwave Outlook

Huawei Launches the Industry’s First 5G Microwave Equipment at MWC 2018

One thought on “IHS Markit: Microwave Network Equipment Market -1%; YoY; 5G to Boost Growth

  1. Survey: Awareness, expectations for 5G are high
    5G comes in third in consumer awareness, just behind virtual reality and artificial intelligence, when ranked against other cutting-edge technologies, with 57% of consumers surveyed saying they’re aware of the innovation. HarrisX CEO and chief researcher Dritan Nesho noted that “expectations are high, with over 2 in 3 Americans believing 5G will become a reality by 2020, which will require significant investment by the public and private sector to get there.”

    “Consumer sentiment around tech innovation and 5G in particular is widely positive, with big expectations for impact on job creation, business, various facets of people’s personal lives like healthcare management in the near future,” said Dritan Nesho, chief researcher and CEO of HarrisX, in a statement. “Expectations are high, with over two in three Americans believing 5G will become a reality by 2020, which will require significant investment by the public and private sector to get there.”

    The inaugural survey, which T-Mobile plans to produce on a quarterly basis with HarrisX going forward, found that 57% of Americans are aware of 5G, and of those who are aware, 90% believe 5G will be better than 4G or LTE. Moreover, 64% of the survey respondents who are aware of 5G expect it to be “widely available” by 2020. Reliability, speed and wider coverage were all cited as the most appealing aspects of 5G among those surveyed.


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