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2 April 2020

Siklu casts doubt on mobile being 5G escape-hatch, offers mmWave

The growth of video services has significantly expanded the market and opportunity for fixed-wireless providers like Siklu, according to the firm’s VP Marketing David Sumi. Specializing in ‘fixed 5G mmWave’ networking equipment, in the 60-80 GHz bands, Siklu is targeting the plethora of ISPs that are still bound to DSL lines, with the ability to offer an alternative to cable and fiber.

Speaking to Faultline, Sumi explained how the market has shifted, noting how ten years ago, the focus was on point-to-point and backhaul. Now, with video proving too heavy for copper internet connections, ISPs are looking to enter the gigabit realm. In Siklu’s view, gigabit is now table stakes, and you have to be able to offer it to customers – which include consumers, businesses, and also smart cities.

So, these ISPs are turning to wireless infrastructure, as a more cost-effective way to rollout a gigabit service – compared to laying fiber. According to Siklu, these costs are going to shrink significantly in the coming year, with the end-user terminal costing around $400 today but expected to be under $200 shortly.

Those terminals are each about the size of a smartphone, and are placed on the customer home to provide a line-of-sight connection to the backhaul network. Those base stations cost around $1,000, but can serve multiple homes, and Siklu can either backhaul the collective traffic wirelessly, or its ISP customers could backhaul via a fiber line, where available. On that point, we asked about throughput, and Sumi said that while Siklu does have a range of 10 gigabit products, these aren’t big sellers, because most of the customer networks can only manage a couple of gigabits.

The US is Siklu’s biggest market, followed by the UK, but Latin America and APAC are growing swiftly. The unlicensed 60 GHz bands are key to this, as Sumi notes these are universally available. While the 70 GHz and 80 GHz bands are also options, they have region-dependent regulations, which can make things more challenging. Siklu would be in favor of more spectrum being made available in those bands, he noted, adding that the US and UK have the most liberal regulatory policy – suggesting the technology’s success is quite closely linked to spectrum availability.

Sumi said that while wireless ISPs are the easiest customers to touch, it is actually the tier 2 ISPs like CenturyLink and Frontier that are Siklu’s best customers. These are the ones that have reached the end of the line, in terms of copper services, and need something to compete against incumbent cable providers.

As for expansion, Siklu has only just expanded into APAC. Sumi noted that it does already have some strong business in Japan, and that APAC has a lot of ‘classic wireless’ opportunities, thanks to the amount of small island markets where it is difficult to run fiber. In particular, APAC has a lot of markets where the economy is strong but the local networking infrastructure is poor, and mmWave broadband connections make a lot of sense there.

Sumi said that ISPs in Latin America and APAC are very aware that they can’t rely on the lower frequency spectrum to provide wireless broadband – hence the demand for mmWave. Mexico, Chile, and Argentina were cited as strong candidates in Latin America, but Brazil is not, according to Sumi, due to its struggling economy and a regulator that is apparently ‘a bit confused.’ There are also interesting related use cases, such as powering security camera networks at gas stations, which Siklu has targeted that fall outside Faultline’s main interest area.

The main argument in favor of unlicensed spectrum is simply the cost, according to Sumi. If you have to buy a license for spectrum, that’s a cost that must be passed on to your customers. With the unlicensed approach, Siklu customers can offer gigabit packages for around $50 a month. Sumi says that if you were to try this via 5G, it would be $80 to $100 a month, simply due to the spectrum overhead. Sumi has significant doubts about the viability of ubiquitous mobile 5G networks too.

We asked whether the likes of Siklu, dependent on unlicensed spectrum, were concerned about the powerful lobbying influence of MNOs, who would want to expand their spectrum holdings at the expense of the unlicensed bands. Sumi said that regulators have seen the value of unlicensed spectrum, and doubts they would take it away. He has also heard rumors that the 3GPP is exploring 60 GHz, but notes that the group probably has enough on its plate already.

The growth of new satellite approaches to broadband was also mentioned, but Sumi said he had been in this game long enough that he has seen the idea of mass market satellite broadband come and go a couple of times. The main argument against the approach, he said, was that they are not as futureproof as terrestrial networks, and that consumers want single digit latencies. The question you need to ask, when encountering satellite, he stressed, was ‘what’s changed since last time?’

Siklu has raised some $49 million in funding since it was founded in 2007. Its latest round attracted Qualcomm and SerComm, a maker of broadband and wireless networking gear, as well as a number of venture firms. With over 100 staff, the firm is headquartered in California, but has a strong presence in Israel too.

According to its website, Siklu has 75% market share in the US and has deployed over 100,000 units across 45 countries. Its claim to fame is the EtherHaul-1200, which it says was the first mass-produced mmWave connectivity system, and which is still the most deployed such device in the world.