Operators are supposed to be busting up their piggy banks to upgrade their backhaul networks in anticipation of increased 3G and eventual 4G data traffic, but a new study from Infonetics shows that one of the key backhaul equipment sectors, microwave radios, was down 8% in the third quarter. The global microwave market brought in $1.4 billion, half of which went to Ericsson (NASDAQ:ERIC) and NEC, according to Infonetics.
Despite the dip, Infonetics said the microwave sector is still strong driven by capacity upgrades for HSPA+ and LTE and the transition from TDM to Ethernet backhaul links. In an earlier study Infonetics projected that the overall backhaul market will increase 60% in 2009. In the US microwave backhaul is still a small business as most operators rely on T1, and increasingly fiber, links. But there has been some activity of late. Clearwire (NASDAQ:CLWR) is building 90% of backhaul and aggregation networks using microwave radios from Motorola (NYSE:MOT), DragonWave (TSE:DWI) and others.