We just published the 4Q19 update to the Microwave Transmission & Mobile Backhaul quarter report. Here are a few key findings for the quarter.

• Microwave Transmission market declined in 2019 following a slight rebound the prior year. The decline in 2019 was due to a massive slowdown in India. We estimate sales to Indian operators declined over 50 percent in the year.
• Huawei continued to hold the largest share of the Microwave Transmission market, garnering 29 percent share in 4Q19.
• Vendor share was more fluid than usual in the quarter. Typically the top three vendors in this market consists of Ericsson, Huawei, and NEC. In 4Q19, Nokia overtook Ericsson for the first time and captured the second highest share.
• E/V Band shipments outperformed in the quarter, helping to bring full year growth rates back up above 20 percent.
• Among the microwave technology segments, we believe E/V Band systems have the greatest growth potential driven by its ultra-high capacity (10 Gbps), small footprint, and low spectrum license fees in certain countries. In addition to these advantages, demand for E-band systems in particular is projected to grow because of the availability of multi-band solutions that combine the benefits of both standard microwave frequencies with that of E-band.

About the Report

The Dell’Oro Group Microwave Transmission & Mobile Backhaul Quarterly Report offers complete, in-depth coverage of the market with tables covering manufacturers’ revenue, ports/radio transceivers shipped, and average selling prices by capacities (low, high and E/V Band).  The report tracks point-to-point TDM, Packet and Hybrid Microwave as well as full indoor and full outdoor unit configurations.  To purchase this report, please contact us at dgsales@delloro.com

The latest Dell’Oro Group CBRS RAN 5-year forecast report suggests delays have not changed the underlying demand for CBRS. The overall CBRS market – LTE plus 5G NR – is expected to grow at a rapid pace between 2019 and 2024 with cumulative RAN investments projected to surpass $1.5 Billion.

Even if the regulatory process has taken significantly longer than expected (> 4 years since initial NPRM), the high level vision has not changed. We continue to believe that there is an opportunity to improve spectrum utilization while at the same time stimulating innovation for both public and private networks. The CBRS band with its unique spectrum sharing characteristics include many of the right ingredients to be a game changer over the long term, making us extremely optimistic about the opportunities within the CBRS band. At the same time, we also believe it is important to be realistic about the potential upside with new opportunities—we still envision that CBRS deployments targeting new business models and use case will need some time to cross the chasm.

Other highlights from the CBRS 5-Year Forecast Report:

• CBRS capex is not projected to have a significant impact on the WLAN capex.
• CBRS investments are projected to account for a mid-single digit share of the overall North America RAN market.
• Activity is anticipated to accelerate rapidly during the forecast period. 5G NR is expected to drive the lion share of the service provider CBRS capex in the outer part of the forecast period while LTE will likely dominate the technology mix for FWA, IoT, and Enterprise deployments through the forecast period

About the Report

Dell’Oro Group’s Advanced Research: Citizen Broadband Radio Service (CBRS) Report offers an overview of the CBRS LTE and 5G NR potential with a 5-year forecast for the CBRS RAN market by technology, location, and buyer along with an analysis about the vendor landscape. To purchase this report, please contact us by email at dgsales@delloro.com.

Every generation of mobile radio technology creates renewed demand for mobile backhaul, and 5G is expected to do the same. So, it is not surprising that the major 2020 trends in mobile backhaul all relate to 5G, what the latest mobile technology means for backhaul transport equipment, and importantly, what we will need “more” of.

Trend #1: More Fiber Backhaul. Undoubtedly, the mobile network will require more network capacity with the roll out of 5G. One of the many benefits of 5G is the option to use a larger amount of spectrum and bump up the capacity for users. This is the reason so many people start a conversation about 5G and immediately shift to talking about what new applications they can run if given more throughput and lower latency on their devices.

Trend #2: More Wireless Backhaul. As in past mobile network upgrades (3G and 4G), operators balanced the use of fiber backhaul with wireless backhaul because installing fiber everywhere was never conceivable. In continuation with this trend, we believe that the mantra of “fiber first” will continue, driving the growing use of fiber backhaul, but eventually cell sites will need to be upgraded where fiber will either take too long to deploy, cost too much, or is infeasible. Therefore with 5G, wireless backhaul systems, such as point-to-point microwave, will play an equally important role for operators to deliver on their targeted network coverage and capacity as fiber systems.

Trend #3: More Carriers. Microwave systems continue to evolve to meet each new generational challenge. We believe one technology that operators will increasingly use in the future, and for 5G backhaul in particular, is combining multiple carriers in one microwave backhaul link. The two options are multicarrier—combining carriers in the same frequency band—and multiband—combining disparate frequency bands such as E-band and 18 GHz. The advantage of both options is higher link capacity with little change in tower footprint (keeping tower lease costs from going up). The additional advantage of multiband is the availability of much higher throughput (over 10 Gbps) at an economical price-per-bit compared to standard microwave frequency links.

Trend #4: More Ethernet. The shift to Ethernet began with 4G and will conclude with 5G. Therefore, the need for TDM-based systems and hybrid systems will continue to decline in favor of Ethernet-based systems (carrier Ethernet switch, routers, packet microwave, etc.) this year and into the future.

Trend #5: More Fronthaul Transport. 5G will likely bring about greater instances where the mobile baseband unit is centrally housed further away from the mobile radio unit (and tower) to obtain greater efficiency. To achieve these longer spans, operators will increasingly use fronthaul transport systems such as DWDM. While this architecture of pooling resources has always been available to operators, we believe the entrance of eCPRI will increase the adoption of centralizing baseband units since it reduces fronthaul capacity requirements.

The Optical Transport market has continuously evolved, giving consumers around the world one of the most precious assets—fast, affordable bandwidth. Whether it is 5G, home broadband, cloud services, or videos of cats, the one technology that enables the existence of these services is optical. So, it is no wonder that the one equipment that service providers (telecom, cable, cloud, etc.) need to continuously invest in and purchase is Optical Transport gear. Luckily for these buyers, market demand has grown at a rate fast enough for optical system and component manufacturers to continuously invest their R&D money towards developing better optical technology that transports more bits at an even better cost. What if this changes in the future?

Consider this: every generation of optical technology costs more to develop. Meanwhile, Shannon’s limit is around the corner, and fewer optical companies generate enough profit to maintain this pace of innovation. I won’t address this long-term concern here, but considering this, I have listed a few trends to watch in 2020.

• Selective vertical integration will continue. System houses such as Ciena, Huawei, and Infinera will continue to invest in developing key component technologies to ensure they capture a significant share of the optical systems market and reduce the bill-of-materials (BOM) on highly advanced coherent line cards. When Cisco closes its acquisition of Acacia, the number of Optical Transport vendors that in-source high-end components (coherent DSP, TIA, drivers, and modulators) will increase. In 3Q19, these four vendors had approximately 60 percent share of the WDM market. If we also consider vendors that have in-house coherent DSPs, this share jumps to 70 percent and could potentially increase if additional vendors decide to “make” rather than “buy.”
• Coherent 800 Gbps-capable line cards will enter the market. We know of three vendors—Ciena, Huawei, and Infinera—that will launch 800 Gbps-capable line cards by the end of 2020. Ciena will be first to market, closely followed by Infinera, and then Huawei. These new line cards will use the latest optical components (90+ Gbaud, photonic integration) and most powerful coherent DSPs with probabilistic constellation shaping that will bring the wavelength performance to near Shannon’s limit.
• A faster shift away from 100 Gbps wavelengths to 200 Gbps and 400 Gbps wavelengths. The use of 200 Gbps wavelengths has already been rising to maintain a steady price-per-bit decline. With the availability of 800 Gbps-capable line cards, the market will increasingly deploy 400 Gbps wavelengths this year. That is, with 800 Gbps-capability, a line card can be employed at 400 Gbps across longer span lengths, making long haul 400 Gbps at an economical price point a reality.
• Coherent 400 Gbps in a pluggable form factor is here. There is no denying that coherent optics will shrink into a pluggable form factor. Both Inphi and NeoPhotonics have announced tests and trials of 400G ZR in QSFP-DD and OSFP form factors as well as a 400G ZR+ version in a CFP2-DCO. It is still a little early in the year, but we believe systems using these pluggable 400 Gbps modules will enter the market by the end of 2020. However, significant sales volume may not occur until 1H21.
• Adoption of IPoDWDM will increase. IPoDWDM isn’t a new concept. It has been available for over a decade, and Cisco has done quite well (relatively speaking) selling IPoDWDM systems. However, this architectural approach never really obtained wide-spread adoption. We think one of the many reasons behind this is that the target market was on core routers stationed in the long-haul network. A better opportunity for IPoDWDM, as evidenced by Inphi’s sales of ColorZ to Microsoft, lies in selling IPoDWDM in metro access applications such as data center interconnect. Therefore, with 400G ZR in a QSFP-DD form factor, we should see a wider adoption of IPoDWDM in metro applications such as data center interconnect and distributed access architecture (DAA).
• System vendors will move into the components market. This may be a more “why not?” situation. If a system vendor develops a component, why not make it available for others to buy, since selling any components will help offset the company’s R&D costs? Also, at the end of the day, it is a good hedge against IPoDWDM. If you don’t win the system business, why not try to win the optical components portion?

Each of these listed trends are by no means revolutionary. In fact, each has been in the making for many years to sustain one goal—fast, affordable bandwidth.

At the end of each year, I like to reflect on the key trends that I believe will drive the products, purchasing, and messaging in the year ahead. I review the past year’s meeting notes and marvel, once again, at my good fortune in speaking frequently with intelligent people. Then, I try to read between the lines to figure out if anything I learned in those meetings foreshadows what’s to come.

I then balance my insights and predictions with the noise from CES as it opens a new year of trade shows. With my inbox full of new product announcements, I can’t help but wonder if products showcased at CES will set the tone for the rest of the year. Will the latest WiFi router, gaming console, and series of IoT devices be the next game changers?  Or will they fall flat like so many other consumer products?

This year, I believe that one of the biggest trends we will see is a fundamental shift in how consumers and service providers think about home networking. A confluence of technologies reaching the market at the same time will have a positive impact on the capabilities and management of home networks, including:

• • WiFi 6: For many years, the evolution of WiFi has been focused on improving two key technical attributes: speed and range. WiFi 6, however, is the first iteration to take a holistic view of wireless technology that encompasses improvements in speed and range as well as network intelligence, analytics, and power efficiency. WiFi 6 also has the capacity to dramatically improve how service providers will be able to provision, manage, troubleshoot, and analyze their in-home networking services. It provides options for remote, zero-touch provisioning of devices and services as well as automatic adjustment of WiFi channels to ensure peak performance.
  • 6GHz Spectrum and WiFi 6E: With so many new connected devices competing for available channels and bandwidth on both the 2.4GHz and 5GHz frequency bands, the WiFi Alliance is introducing WiFi 6E, which uses the unlicensed 6GHz band. In 2020, we expect that many countries will provide access to the 6GHz band. This means that a huge chunk of unused spectrum will become available for the growing number of residential and enterprise WiFi devices. More importantly for cellular operators rolling out 5G networks, the 6GHz spectrum band will allow the provision of seamless handoffs to mobile devices in homes and offices where their networks might have had difficulty penetrating walls and treated windows. There has been much discussion about the pending boom in AR (Augmented Reality) and VR (Virtual Reality) applications for a number of years. With the availability of the 6GHz spectrum, those applications can be delivered, in theory, without fear of latency due to channel contention. 6GHz will provide fourteen additional 80MHz channels and seven 160MHz channels. These will be needed for the intense, high-bandwidth applications.
  • Simplified Control: If you were to compare the user interfaces (UIs) of home gateways and routers from just two years ago to those available today, you’d be hard-pressed to find an area that has seen more positive evolution. But 2020 will see even greater transformation in an effort to give subscribers total and intuitive control over their broadband subscriptions. Voice control of broadband services is one of the areas that we expect will see the most growth. Google’s Nest WiFi mesh systems now include voice control and allow users to verbally turn on a guest network, reboot the system, and initiate parental controls and speed tests. Quietly – and just before the end of last year – Amazon announced Alexa-enabled voice control of its eero routers as well as those from ARRIS/Commscope, Asus, Belkin, Netgear, and TP-LINK. The feature is called Alexa WiFi Access. We expect to see this service integrated across a wider range of devices during the year, including integration into service provider-supplied gateways, particularly those from U.S. cable operators.

These technology developments, coupled with the ratcheting up of competition between service providers and consumer electronics companies for home network dominance, will allow consumers to have substantially better control of their WiFi networks in 2020.

Fast-Tracking DOCSIS 4.0, DAA, and 10Gbps

It seems like just yesterday when details emerged surrounding DOCSIS 4.0, which combines two next-generation technology options for cable operators — Extended Spectrum DOCSIS (ESD) and Full Duplex DOCSIS (FDX) — into a single standard with the aim of delivering 10Gbps services to all customers. CableLabs started drafting the specifications last year. Just this week, the company confirmed that the draft version will become available in the first half of 2020.

At the same time, cable operators are expected to launch their first 10Gbps services this year. However, these deployments are not expected to be tied to the DOCSIS 4.0 specification. Instead, they will rely on 10G EPON from remote OLTs located in traditional optical node housings. While focused on Full Duplex DOCSIS to support the mass market delivery of 10Gbps services to existing residential customers, Comcast is also sprinkling in 10G EPON in greenfield deployments, particularly in regions where it competes with fiber-based ISPs. Other cable operators are following a similar path. But instead of Full Duplex DOCSIS, they will rely on ESD. In both cases, outside plant spectrum will be increased to 1.8GHz.

Regardless of which DOCSIS 4.0 technology path a cable operator decides to follow, a precursor to these deployments will be the rollout of distributed access networks. With the DOCSIS 4.0 standard establishing a clear path forward, cable operators can now move ahead with their remote PHY and remote MACPHY deployments to solve immediate headend space and power consumption issues. At the same time, they can feel confident that any DOCSIS 4.0 technology decision they make will start them on the path toward 10Gbps services.

In 2020, we expect cable operators to ramp up their spending on upstream channel capacity in an effort to improve the subscriber experience with services such as online gaming, as well as reducing the time it takes to upload videos to the cloud. A number of operators have already moved to, or are in the process of moving to, mid-split architectures as they pull fiber deeper into their networks. Mid-split architectures allow cable operators to increase upstream capacity from 5-42MHz to 85MHz, providing a theoretical maximum of around 300Mbps of upstream bandwidth. Like DAA, moving to mid-split is another step on the path toward DOCSIS 4.0. With the implementation of 1.8GHz of spectrum, mid-split will allow an upstream path to span up to 684MHz, a nearly 10x improvement over today’s prevailing upstream rates. More importantly, the move to 1.8GHz will allow operators to flexibly operate on six different upstream path splits, resulting in multi-gigabit services.

Other Trends to Watch

In addition to these trends, we expect to see a significant jump in virtualized access platform deployments. The second half of 2019 saw a major ramp in virtual CCAP deployments. Once again, this growth was largely driven by Comcast, as it continues to expand its R-PHY deployments. We expect this trend to continue both within Comcast and among its peers, particularly Cox Communications and Videotron in Canada.

Outside of cable, we expect to see AT&T make headway in its virtual OLT rollout using XGS-PON. In September, the operator said that it expected to have 100% of its core network traffic controlled by SDN. This was step one in its long-term CORD vision. Access platforms, such as OLTs, will receive the virtualization focus in step two. Though we don’t expect to see any pure white box OLTs in AT&T’s production network in 2020, we do expect to see announcements of SDN control of a good portion of the operator’s access network by the end of the year.