& cplSiteName &

MSOs Slash Hardware Spending Again

Alan Breznick
8/30/2013
50%
50%

In another down quarter for cable equipment vendors, shipment revenues for new edge QAM and cable modem termination system (CMTS) devices plunged in the spring, particularly in North America, according to the latest data from Infonetics Research.

In its new survey, Infonetics Research Inc. found that edge QAM and CMTS revenue in the critical North American market fell 27 percent in the second quarter from the same period a year earlier. The big drop in spending follows a decrease in the first quarter as well.

Edge QAM and CTMS revenue fell globally as well during the second quarter, but not nearly as much as in North America. Infonetics says worldwide equipment revenues slipped to $313 million in the spring, down 4 percent from the year-ago period and the second straight quarterly decline as well.

Jeff Heynen, principal analyst for broadband access and pay TV at Infonetics, blames the large North American revenue falloff on the "turnup" of a large number of software licenses by US and Canadian cable operators. MSOs use these software licenses to upgrade gear that they have already installed in their cable systems. But, while they pay for these licenses when they carry out the upgrades, they don't shell out as much per port for software as when they buy new equipment.

As a result, North American port pricing fell about 15 percent in the quarter even as cable operators boosted their capacity to offer new broadband and video services, Heynen says. In turn, overall revenue fell as well.

"Once again, the cable broadband market aggregation market is a tale of opposing trends," he adds. Namely, there was "increasing channel capacity to support DOCSIS 3.0, multiscreen, and OTT video, and decreasing price-per-channel."

With the first cable operators now starting to deploy next-gen Converged Cable Access Platform (CCAP) equipment in their systems, Heynen says CCAP is starting to have an impact on the cable broadband hardware market. He noted, though, that most MSOs are initially using the new CCAP gear "as nothing more than dense CMTS and edge QAM platforms," not as integrated devices for processing both data and video channels in the cable headend.

Heynen predicts that the growing CCAP deployments will cause further pricing erosion in 2014 and 2015. But he argues that overall revenues will still rise because channel volumes will soar even more. In fact, Infometics' latest forecast calls for global revenues to rise to $2 billion by 2017, up from about $1.3 billion this year.

"2013 will be the nadir of recent and future years," he said. "But good times lay ahead as channel volumes across the board should more than offset the continued ASP [average sales price] erosion."

Looking at the latest quarterly vendor rankings, Cisco Systems Inc. (Nasdaq: CSCO) retained its CMTS market edge over Arris Group Inc. (Nasdaq: ARRS) in the spring. Cisco, which had dropped to second place in the rankings last fall, took home 51 percent of the CMTS revenues for the second straight quarter, according to Infonetics. Arris finished a strong second place with a 42 percent revenue share, thanks in part to its acquisition of Motorola Home in April. Casa Systems Inc. moved up to an 8 percent share, thanks in large part to its head start in the still-emerging CCAP market.

On the edge QAM side, Cisco came out ahead with a 32 percent market share, edging out Harmonic Inc. (Nasdaq: HLIT) and Arris.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

(1)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
albreznick
50%
50%
albreznick,
User Rank: Blogger
8/30/2013 | 2:37:58 PM
Impact of CCAP
OK. To me, the big questions here are what kind of impact CCAP will have on the cable broadband equipment market and how soon that impact will be greatly felt. We're also still waiting to see what Harmonic, CommScope and other possible candidates will do in the CCAP vendor space. We'll entertain any and all predictions here. 
From The Founder
Either we perform a complete 'factory reset' on the way the telecom industry creates and deploys virtualization, or we face the consequences.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
Women in Comms Introduction Videos
How Diversity Helps Comcast Mirror Its Customer Base

4|26|17   |   2:55   |   (0) comments


Diversity brings innovation, creative ideas and a way to reflect the broad spectrum of your customer base, Comcast Director of Customer Experience Jenelle Champlin says.
LRTV Huawei Video Resource Center
Mobile Operators & Video

4|25|17   |     |   (0) comments


Ovum's Ed Barton discusses the latest mobile operator strategies for mobile video.
LRTV Custom TV
Infinera Introduces Instant Network

4|20|17   |     |   (1) comment


Mike Capuano, vice president of marketing at Infinera, discusses the advancement from Instant Bandwidth to new Instant Network capabilities, which include Bandwidth License Pools, Moveable Licenses and Automated Capacity Engineering (ACE).
Women in Comms Introduction Videos
Vodafone's Eubank on Sponsors, Mentors & Moving On Up

4|19|17   |   4:25   |   (0) comments


Vodafone America's Head of Operations Kimberly Eubank breaks down the difference between a sponsor and a mentor and shares why both made a big difference in her career.
LRTV Custom TV
NYC Auto Show: Are We Smart Yet?

4|18|17   |     |   (0) comments


The auto industry is facing some big transformations as electric vehicles, autonomous technology and connected cars are seen as the future of the industry. During the much-anticipated NY international auto show, there was an emergence of new technology and mobility service on the show floor. Aside from performance, brands like Lincoln, Hyundai, Honda, Mercedes and ...
LRTV Huawei Video Resource Center
The Impact of Video

4|18|17   |     |   (0) comments


David Mercer from Strategy Analytics discusses the impact of video on current strategies.
LRTV Custom TV
Pardeep Kohli Discusses Network Transformation & the Market Opportunity for the 'New' Mavenir Systems

4|13|17   |     |   (0) comments


In a brief discussion at MWC 2017, Heavy Reading analyst Adi Kishore talks to Pardeep Kohli, CEO, Mavenir Systems about the creation of the 'new Mavenir' and some of the key challenges facing operators in today's market. A key theme of the discussion centers around operator need for software-only, virtualized solutions and how they will need to adapt to ...
Women in Comms Introduction Videos
Tech Maverick Shares Her Tips for Gender Inclusivity

4|12|17   |   7:28   |   (0) comments


Wendy Hall Bohling, a corporate escapee, author and gender exclusivity consultant, tells her story of sexism, bias and progress along the road to gender equality in the workforce.
LRTV Huawei Video Resource Center
Huawei at MWC 2017

4|11|17   |     |   (0) comments


At Mobile World Congress 2017, the biggest mobile industry gathering of the year, Huawei showcased its new innovations and solutions with the theme "Open Road," which focuses on cloud, 5G, operation transformation, videos and consumer-oriented products. Its campaign has been recognized by three awards given by GSMA.
LRTV Custom TV
China Telecom NFV Infrastructure on RSD

4|6|17   |     |   (0) comments


Lynn Comp, senior director of market development of Intel, is joined by Chong Zhang, storage engineer at Inspur and Ou Li Yan, architect for technology strategies of China Telecom, for a discussion of what NFV brings.
LRTV Custom TV
Nokia's IMPACT Software Demo

4|6|17   |     |   (0) comments


Khamis Abulgubein of IoT market development at Nokia demonstrates IMPACT (intelligent management platform for all connected things), a software solution with a horizontal approach to managing any device on any application.
LRTV Custom TV
Nokia Introduces Virtual Service Router for More Rapid Service

4|6|17   |     |   (0) comments


James Cumming, product line manager for virtualized service routers at Nokia, demonstrates how the virtual router based off the Nokia ecosystem changes the network function experience.
Upcoming Live Events
May 15-17, 2017, Austin Convention Center, Austin, TX
May 15, 2017, Brazos Hall - Austin, TX
May 15, 2017, Austin Convention Center - Austin, TX
June 6, 2017, The Joule Hotel, Dallas, TX
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Time for a Telecom Reboot
Steve Saunders, CEO and founder, Light Reading, 4/19/2017
Surprise! AT&T Markets 4G Advances as '5G Evolution'
Dan Jones, Mobile Editor, 4/25/2017
Did Verizon Outbid AT&T for Straight Path?
Dan Jones, Mobile Editor, 4/25/2017
First Year TIPs the Scale Toward Success
Denise Culver, 4/24/2017
Unlicensed: It's What's Next for US Mobile Operators
Dan Jones, Mobile Editor, 4/19/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
TEOCO Founder and CEO Atul Jain talks to Light Reading Founder and CEO Steve Saunders about the challenges around cost control and service monetization in the mobile and IoT sectors.
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.