The Microwave Transmission market dropped to a new quarterly revenue low in 2Q17, declining 18 percent year-over-year (Y/Y). The main factors driving this disappointing quarter was a sharp reduction of purchases in the Indian region and broad slowdown in the Vertical markets.

  • We estimate that radio TRx shipments into India declined sharply quarter-over-quarter (Q/Q), following an outsized purchase by Reliance Jio in the prior quarters. We expect deployments in the India region to improve during the second half of the year, but not at a high enough level to offset the recent decline.
  • In 2Q17, the Verticals market declined at a double-digit percentage rate compared to a year-ago. We do not have specific details on the customer categories that make up the Verticals market, but we believe most of the decline was due to fewer telecom long haul deployments and a softer public safety sector. However, deployments by wireless internet service providers likely continued to expand.

Average selling price (ASP) of microwave radio transceivers continued to be stable with a relatively small amount of price erosion. We estimate that radio transceiver ASP declined below five percent Y/Y in 2Q17. We attribute this smaller price erosion to the following factors: 1) declining share of revenue from mobile backhaul; 2) reduction in new large contract bids; and 3) shift to higher capacity radio transceiver systems.

The bright spots for the microwave market continued to include E/V-Band, which grew five percent Y/Y, and Full Outdoor Unit systems, which grew four percent Y/Y, even with the total Microwave market’s decline in the back drop.

One vendor stood out in the quarter. While all other vendors experienced flat to down Q/Q sales into India during the quarter, Ceragon benefited from a large one-time order. Hence, Ceragon’s India revenue grew 87 percent Q/Q, which helped to raise its worldwide market share by 240 basis points to 11 percent in 2Q17. As a result, Ceragon was able to claim the third highest market share position in the quarter (Figure 1).

 


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Posted by Jimmy Yu on August 31, 2017

About Jimmy

Jimmy Yu built our coverage on the Microwave Transmission market, significantly expanded coverage on the Optical Transport market, and is responsible for Storage Systems market research. He has authored several Advanced Research Reports on Mobile Backhaul and is researching Carrier SDN.