July 9, 2007

Fixed Wireless at NXTcomm 2007: Microwave and Millimeter Wave, Wherefore Art Thou?

Notable by their absence among the exhibitors at NXTcomm were microwave and millimeter wave equipment vendors.  Where were they?  And why weren’t they at NXTcomm?  Has the fixed wireless (microwave and millimeter wave) market softened?  Not exactly.

Certainly, the large, multi-equipment type vendors such as Alcatel-Lucent, Ericsson, and NEC had booths at the event, but Ceragon Networks was conspicuous by its presence at the show as the only pure wireless player among the microwave system manufacturers.  Of the millimeter wave equipment vendors, only ELVA-1, a newcomer to North America via its importing partner Gilland Electronics, exhibited.

There are many reasons to choose not to exhibit at NXTcomm.  The fixed wireless vendors’ absence was a result of several of the following factors:

First, the fixed wireless carrier industry consolidated a bit during the past year.  A year ago, Fibertower, First Avenue Networks, IDT Spectrum, and Nextlink (XO’s fixed wireless company) were vying for cellular backhaul customers, while Nextlink and Towerstream were high-profile fiber extension/special access business connectivity providers.  Since then, Fibertower acquired First Avenue.  IDT Spectrum called it quits.  Nextlink, while still giving lip service to cellular backhaul, seems to have refocused on the business connectivity market in conjunction with XO’s fiber network.  And, of course, Towerstream continues to thrive in its market segment.

In today’s market, then, Fibertower dominates cellular backhaul.  Towerstream is the dominant business connectivity provider.  And XO’s Nextlink is serving the business market, as well.  No new, large providers have stepped forward.  AT&T continues to use its spectrum internally.  TelCove’s spectrum remains unused in Level 3’s hands.  Certainly RBOCs and cellular carriers use microwave connections within their networks, but they have been doing that for years.  Their vendor relationships are well-established.  With little or no new carrier activity in this market, there is little reason for attendance at an industry conference.  While Ceragon was able to tout a recent win (Nextlink), get involved in the Metro Ethernet Forum, and roll an analyst meeting into its trip to Chicago, other wireless-only vendors likely saw little value in attending.

The real action in the fixed wireless segment is in millimeter wave.  This segment, too, faces an interesting situation.  Though clearly a metro backhaul solution of the future, its “present” is in the enterprise space.  To date, most new millimeter wave customers are enterprise customers, connecting buildings or campuses via high-capacity wireless links.  NPRG caught advanced warning that the segment would be lightly represented; a representative from one of the major millimeter wave vendors commented that it received more bang for its trade show buck (and personnel time) at IT shows than at carrier events.

Still, millimeter wave is under consideration and undergoing carrier testing for high-capacity, short-distance connectivity.  Initial, niche carriers such as WiLine Networks and 1Velocity – typically, carriers serving a single metro area – will soon be joined by their larger, more well-known, regional and national carrier brethren.  For now, though, the initial connections have been made, and the vendors are largely attending to attract today’s customers (rather than showcasing to tomorrow’s potential clients).

Millimeter wave wasn’t entirely absent from the NXTcomm show floor, however.  ELVA-1, a Russian millimeter wave vendor, attended with its U.S. partner, Gilland Electronics.  The company is not yet widely known in the U.S., so its attendance was natural – an attempt to raise its profile within the North American market.  Some of the more well-known vendors did have equipment present on the show floor, displayed quietly as OEM equipment sporting other vendors’ logos as part of broader displays.

What should be made of fixed wireless (microwave and millimeter wave) vendors’ relative absence from NXTcomm?  Not very much.  Simply, there wasn’t much of a new story to tell this year, though the market segment is still an integral part of the telecom industry’s heady wireless plans of the future.