4G World: Proxim targeting wireless operators with licensed backhaul

Chicago -- As its name implies, 4G World is focusing on wireless access technology, specifically the WiMax and long-term evolution (LTE) networks launching in the U.S. and worldwide, but the backhaul links that connect that wireless infrastructure have become just as key an issue at the show.

Proxim Wireless announced today it is entering the licensed microwave backhaul space—or more accurately re-entering it after a decade-long hiatus—in an effort to expand its exposure to Tier 1 wireless operators. While Proxim sells all sorts of its Tsunami access and backhaul wireless gear to wireless ISPs, government networks and vertical markets, operators have traditionally been outside of its market because of their need to hold the rights to the spectrum they use. According to Proxim vice president of marketing Robb Henshaw, all of its customers have started asking for licensed products as the unlicensed bands become more crowded.

“What it came down to was demand,” Henshaw said. “Not having the licensed piece just didn’t make sense for us any longer.”

At 4G World today, Proxim took the wraps off of the Tsunami GSX800, a point-to-point microwave backhaul solution spanning the airwaves from 6 GHz to 38 GHz, allowing it to address all global microwave markets. The system is fast, supporting 622 Mb/s over a maximum of 56 MHz of spectrum, and unlike other vendors Proxim isn’t selling the capacity in increments. It’s giving access to the full capacity out of the box for the $15,000 per link price.

Of course, Proxim is entering a very crowded microwave market, which already has half a dozen very large vendors vying for the top market slot. According to Infonetics, Ericsson (NASDAQ:ERIC) is currently the leader in global microwave equipment sales, followed closely by NEC, Huawei and Nokia Siemens Networks (NYSE:NOK, NYSE:SI). Proxim doesn’t appear to be too discouraged. Henshaw said it already has two operator customers for the new Tsunami, a Tier I international operator and a regional North American wireless service provider. Several other Tier 1 wireless operators are also testing its gear.

Even if the microwave market is a tight one, Henshaw said, Proxim still has its traditional WISP and public network market to fall back on. Demand for licensed products is nearly as high in those spaces, he said.

According to Infonetics, the overall microwave market has been rather listless, falling 4% from the first to second quarter, due largely to the recession, but the research firm expects the market to return to steady growth in 2011. The one big bright spot in backhaul is in Ethernet equipment sales over both wireline and wireless links, accounting for 80%, or $4.8 billion, of all backhaul equipment sales last year. Infonetics expects a similar spike this year and for the overall Ethernet backhaul market to grow to $8.2 billion by 2014.

Alcatel-Lucent (NYSE:ALU) in particular has benefitted from the sales of Ethernet cell site routers and gateways, taking the No. 1 sales slot with 23% of all global revenues for the first half of 2010 and beating out Ethernet backhaul specialist Tellabs (NASDAQ:TLAB) as well as Cisco Systems (NASDAQ:CSCO) and Huawei. ALU is hoping to build off that lead with a new Ethernet aggregation platform, the 7705 Service Aggregation Router, announced today at 4G World. The router, which aggregates traffic from multiple cellsites before passing traffic into the core is built into ALU’s end-to-end network management portfolio, which allows carriers to manage policies across its network from base station to core.

Wireless backhaul supplier DragonWave (NASDAQ:DRWI) today announced a contract to supply its Horizon and Quantum radios to Atlantic Tele-Network (NASDAQ: ATNI), a wireless operator with networks in underserved markets in the US as well as in the Caribbean and Bermuda. Though not a huge carrier contract, it provides much needed diversification to DragonWave’s customer base. DragonWave’s key customer is Clearwire (NASDAQ:CLWR) which uses microwave and millimeter wave radios almost exclusively to backhaul traffic on its WiMax network and to create redundant rings in its metro markets. Clearwire, however, provides so much of DragonWave’s business that the vendor’s revenues vary drastically depending on Clearwire’s rollout schedule.