The small cell backhaul market has been crowded with innovative start-ups trying to address the very real problem of delivering capacity to hundreds of tiny cell sites, at price points that make the architecture economically viable.
However, for all the smart ideas – from millimeter wave, to backhaul SON, to point-to-multipoint – it has been a tough ride, especially for the specialists with no other revenue streams. The roll-out of large-scale outdoor small cell networks has been slow to take off, outside certain exceptional markets, and while indoor deployment has been faster, these projects can usually rely on the building’s existing broadband lines for backhaul.
So consolidations and even failures have been on the cards and this week, two of the innovators, Fastback Networks and Sub10 Systems, have agreed to merge. They will bring together complementary approaches in sub-6GHz and millimeter wave spectrum respectively, broadening their product range while achieving greater scale, while keeping some options open in terms of the frequency bands that gain critical mass in future. The companies said they intend to create a “hybrid” backhaul platform which supports different frequencies, and both line-of-sight and NLOS approaches.
Fastback has been successful in diversifying its range so that it has revenues from enterprise and macrocell markets, leaving it less exposed to the wait for small cell volumes. Both firms say they have deployments with tier one operators.
“Traditional backhaul is a weak link in the LTE/5G chain, hindering wireless service growth, and driving demand for innovation in high performance backhaul solutions,” said Kevin Duffy, Fastback’s CEO. His counterpart at Sub10, Stuart Broome – who will be chief sales and marketing officer of the combined entity – added: “Fastback’s sub-6GHz and Sub10’s millimeter wave solutions and technology are complementary LOS and NLOS solutions, sharing high performance and low latency characteristics. Our merged company will provide the combination of these solutions that our customers require to enable densification of mobile networks.”
Together, the two vendors have amassed financing of over $50m and their respective investors are all maintaining stakes in the combined firm. Sub10’s principal backer was the UK-based Business Growth Fund, supported by five major UK banks. Fastback’s investors include Foundation Capital, Granite Ventures, Harmony Partners, Juniper Networks and Matrix Partners.
The new firm will keep the Fastback Networks name and will number 75 people. It will retain the headquarters in San Jose, California while Sub10’s UK base will become the European headquarters.