Remote OLT sales activity spotlights cable's growing focus on fiber

Overall PON and fiber-to-the-premises (FTTP) deployments blossomed in 2021. That growth included an uptick in sales of remote OLTs (optical line terminals), shining a light on the cable industry's rollout of fiber-fueled services in certain scenarios, according to Dell'Oro Group analyst Jeff Heynen.

Heynen, vice president of broadband access and home networking at Dell'Oro, noted that he is starting to apply more focus on the sale of remote OLTs that can be fitted into nodes to support PON services. He estimates that remote OLTs drove about $300,000 in revenues in 2020 but surged to more than $10 million in 2021.

"We're still in the early stages of that [market], but it's picking up," Heynen said. "I see that [remote OLT] revenue easily doubling this year."

Figure 2: Dell'Oro has seen an uptick in sales of remote OLTs, devices that can snap into nodes and support fiber-to-the-premises deployments. Pictured is the CommScope XE4202|XE4202 Remote OLT, which can be used in fiber nodes linked to a distributed access architecture.
(Source: CommScope)

Sales and deployment activity of remote OLT products are on the rise as cable operators deploy FTTP networks in some new-build opportunities and overlays, and as they convert some existing nodes to support FTTP. The increase is also the result of cable operators such as Charter Communications pushing ahead with FTTP deployments linked to the Rural Digital Opportunity Fund (RDOF).

With that part of the market starting to expand, Heynen says that he anticipates the path forward for cable operators on the access network to evolve into a "three-way split" that will include both flavors of DOCSIS 4.0 – Extended Spectrum (ESD) and Full Duplex DOCSIS (FDX) – as well as fiber.

"That's why I think the market is in this point of stasis for cable equipment," Heynen said.

DAA momentum

According to Dell'Oro, total cable access concentrator revenue – a category that includes DOCSIS infrastructure elements such as converged cable access platform (CCAP) cores and chassis, virtual CCAP licensing, and distributed access architecture (DAA) nodes and modules – reached $1 billion in 2021, up 4% from 2020. CommScope led the cable access market with a 43% share, ahead of Harmonic (25%), Cisco Systems (20%) and Casa Systems (8.8%).

The research firm is seeing "steady growth" of DAA deployments, which are helping to offset declines in traditional CCAP licenses.

Heynen said that sales of remote PHY devices (RPDs) for DAA deployments are up – revenues rose 47% in 2021, while unit growth climbed 45%. But it's still early days, as the analyst estimates that total RPD unit shipments are still below the 60,000 mark.

Heynen expects DAA shipments to stay relatively steady in 2022 and later rise as cable operators get more aggressive with "high-split" upgrades on the DOCSIS 3.1 plant that expands the amount of spectrum allocated to the upstream. DAA also paves the path to DOCSIS 4.0.

PON OLT sales set a record

On the fiber side of the access network ledger, PON OLT shipments reached a record 140 million units in 2021. Revenues in the OLT market for North America jumped from $504 million in 2020 to $900 million in 2021, Dell'Oro found.

"There's a lot of infrastructure going into the ground right now to support fiber and PON," Heynen said.

Turning to consumer premises equipment (CPE), shipments of the DOCSIS 3.1 units were up in Q4 2021, but overall shipments for the full year were flat compared to 2020.

Heynen attributed that to a confluence of factors: Supply chain constraints became more acute toward the back half of the year; some operators likely bulked up CPE inventories during the earlier phases of the pandemic; and the pace of broadband subscriber additions slowed in 2021.

Heynen said that he expects CPE numbers to climb again in 2022, noting that some operators may need to replace older gateways and modems as they pursue mid-split and high-split upgrades on the DOCSIS network.

Bigger picture, Dell'Oro said that the overall broadband access equipment market rose 12%, to $16.3 billion in 2021, aided by PON infrastructure and fixed wireless CPE spending.

Dell'Oro's longer range, five-year forecast sees spending on PON and cable equipment, along with fixed wireless CPE, peaking in 2024 at $18 billion.

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— Jeff Baumgartner, Senior Editor, Light Reading