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December 7, 2022
PON deployments fueled higher broadband access network sales growth in Q3 2022, but cable network spending was a mixed bag as overall sales flattened but sales of distributed access architecture (DAA) gear climbed, Dell'Oro Group said.Dell'Oro said total broadband access equipment sales jumped 17%, to $4.7 billion, with PON equipment fueling the overall market. Notably, PON OLT (optical line terminals) sales broke last quarter's record of $1.3 billion, the research firm said.Figure 1:(Source: the lightwriter/Alamy Stock Photo)PON growth is coming from a mix of activities. "Expansion projects, new projects, overbuilds, you name it – the type of demand we're seeing is all across the board at the moment," Jeff Heynen, VP of broadband access and home networking market research at Dell'Oro, said.PON-based activity is also coming at the expense of DSL. Dell'Oro expects only about 7.5 million DSL ports to be purchased for the entire 2022 year, compared to a global tally of 22 million back in 2020. Past investments in upgrading or sustaining DSL "is very clearly going into fiber-to-the-home networks," Heynen said.Purchases of XGS-PON ports are picking up as telcos build and deploy symmetrical multi-gigabit-capable fiber-to-the-premises (FTTP) networks, but they're still less than half of GPON, Heynen said. He notes that price points for 2.5-Gig GPON are low enough for telcos to stick with that technology set, particularly if they don't have another gigabit-class competitor in the market.DAA action a bright spot for cable access sectorShifting to the cable sector, Q3 cable access concentrator revenues of $259 million were flat versus the year-ago period. That category includes DOCSIS infrastructure elements such as converged cable access platform (CCAP) cores and chassis, virtual CCAP licensing and DAA nodes and modules.However, Dell'Oro found that DAA activity continues to rise, as sales for remote PHY devices (RPDs) posted a record $73 million in the quarter, roughly double from a year earlier. Heynen said Q3 was the fifth-straight quarter of positive revenue growth for RPDs.Within the cable concentrator market, Dell'Oro continues to see demand climb for remote OLT modules that can be plugged into new DAA nodes and support targeted deployments of FTTP technology. Sales volume of remote OLTs is still relatively low, but they are about 6x where they were in the year-ago quarter, Heynen said.Much of that growth, he said, is coming as cable operators supplement some of their "mid-split" and "high-split" upstream upgrades for hybrid fiber/coax (HFC) networks with FTTP capabilities that can be targeted to certain residential or business customers being served out of the same DAA nodes.CommScope's lead narrowsThe migration toward DAA and, in some cases, virtualized cable access networks, is also affecting vendor market share.According to Dell'Oro, CommScope's lead on the pack is narrowing. CommScope's 36.5% revenue share in Q3 was followed closely by Harmonic's 35.5%. Vecima Networks (12%) was a solid third, while both Casa Systems and Cisco Systems were in the neighborhood of 7.5% to 8%.Dell'Oro also reported that total shipments of cable customer premises equipment (CPE) units rose 5% as suppliers fulfilled backlogged orders. Cable CPE revenues jumped 9%, due in part to sales of higher-end DOCSIS 3.1 gateways outfitted with technologies such as Wi-Fi 6 and Wi-Fi 6E, Heynen said.Looking into 2023, Heynen said the broadband access network market is a "tough read right now."While it's impossible to ignore that demand remains high for baseline infrastructure, he cautions that purchases of end points (cable CPE and PON optical network terminals, for instance) could be at risk due to sluggish housing starts and reduced move activity among consumers.Related posts:DellOro: Broadband equipment spending remains at record levels in 3Q 2022Remote OLT sales activity spotlights cable's growing focus on fiberCable ops worldwide in hot pursuit of virtual CMTS – Dell'OroCharter changes approach for its cable access network – sourcesDAA set to lead cable ops to next-gen HFC and FTTPComcast reaches 'second phase' of its DAA journeyCable harmonizing around Comcast's DAA path, Harmonic CEO says— Jeff Baumgartner, Senior Editor, Light Reading
Senior Editor, Light Reading
Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.
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