Reflecting recent broadband subscriber trends, shipments of fixed wireless access (FWA) customer premises equipment (CPE) surpassed shipments of cable/DOCSIS CPE in the second quarter of 2024, according to new data from Dell'Oro Group. It marked the first time FWA unit shipments eclipsed cable.

Roughly 4.3 million FWA units were shipped in Q2 compared to just 4.1 million DOCSIS units, Jeff Heynen, Dell'Oro Group VP tells Light Reading.

To illustrate the decline in DOCSIS units in recent years, Heynen noted that about 7 million units were shipped in the year-ago quarter, and about 11 million units were shipped in Q3 2018 and Q4 2018. Meanwhile, FWA CPE shipments posted a fourth consecutive quarter of year-over-year growth in Q2.

Heynen said cable CPE shipments hit a 20-plus year low in the period. That low point has emerged as DOCSIS 4.0 modems begin to ramp, and as operators explore other options such as upgraded or "extended" DOCSIS 3.1 modems that can beef up upstream speeds by supporting additional orthogonal frequency-division multiplexing (OFDM) channels.

That shift in CPE shipments also represents an inflection point of sorts as FWA service providers continue to gain subscribers while cable operators struggle to return their core broadband businesses to subscriber growth.

Turning to the network, spending on DOCSIS infrastructure dropped 25% in Q2 2024 versus the year-ago period. Heynen said the biggest drop in cable infrastructure spending came from the traditional integrated CMTS, which saw revenues decline about 50% in the quarter.

However, spending on distributed access architecture (DAA) equipment, such as remote PHY devices, remote MACPHY devices, remote OLTs and virtual cable modem termination systems (vCMTS), was essentially flat year-over-year, according to Dell'Oro.

Heynen expects DAA spending to increase in the second half of 2024 and ramp further up in 2025.

That will help to set the stage for a bit of a cable comeback. Thanks to a boost in the second half of 2024, Heynen expects cable infrastructure spending to be flat or up 1% for the full year, and post an increase for full-year 2025. However, he acknowledges that a move to DAA and DOCSIS 4.0 won't deliver the same kind of revenue boost that cable tech suppliers saw in prior DOCSIS upgrade cycles.

Among suppliers, Harmonic led the way in Q2 with 44% of cable infrastructure revenues, compared to CommScope (25%) and Vecima Networks (21%). Casa Systems, which had just 2% of the revenue share in the first quarter of 2024, recently sold its cable assets to CommScope following an auction.

PON spending also down in Q2

Driven by an 18% drop in spending on PON optical line terminals (OLTs), total PON spending was also down 6% in Q2 versus the year-ago period. Overall economic struggles in China are influencing the PON market, Heynen said.

However, PON ONTs (optical network terminals) did well across all regions, but were aided by the increased use of fiber-to-the-room applications in China.

China, Heynen points out, has been shifting to fiber-to-the-room scenarios that might use two to three ONTs per home rather than a single ONT in densely occupied multiple-dwelling units. That set-up, he said, is helping operators manage channel contention issues with Wi-Fi and deliver a better overall experience. Heynen said the approach is gaining a little bit of traction outside of China, primarily in Switzerland and parts of Latin America, but remains an overly expensive labor proposition for the US and other parts of Europe.

A brighter second half of 2024?

As for the bigger picture, Dell'Oro said total global revenue for the broadband access equipment market dropped 8% to $4.2 billion in Q2 2024. The bright spot? Spending rose 4% versus Q1 2024, a quarter that turned in the lowest level of spending in nearly three years.

Heynen said that sequential quarterly trend bodes well for an improved second half of the year. He also believes that more clarity tied to the $42.45 billion Broadband Equity Access and Deployment (BEAD) program might also loosen some purse strings.