Dell'Oro said cable access 'concentrator' revenues dropped to just $197 million in Q3 as operators pause or slow spending and pull from existing equipment inventories.
Illustrating a broader spending slowdown among operators, cable access "concentrator" revenues dropped to just $197 million in Q3 2023, a year-over-year decline of 18%, Dell'Oro Group reported Thursday.
That concentrator category includes remote PHY and remote MACPHY devices tagged for distributed access architecture (DAA) upgrades, remote OLTs (optical line terminals) and virtual cable modem termination systems (vCMTSs).
Within that category, Dell'Oro said spending on remote PHY and vCMTS platforms both saw slowdowns in Q3 as cable operators pulled from existing inventories. Meanwhile, revenues for remote OLTs – devices being used in nodes to support targeted fiber-to-the-premises (FTTP) deployments – were up year-over-year, but down from the prior quarter, the research firm said.
Dell'Oro also tracks outdoor plant equipment (such as amplifiers, hardline splitters, passives, taps and node housings) separately.
Dell'Oro's report on the cable access concentrator category puts some numbers to a trend that suppliers have been warning about in recent months – that cable operators have paused or dialed back spending in the near-term as they try to pare down oversized equipment inventories and also grapple with labor shortages. Most suppliers believe operator spending will rebound in the second half of 2024.
Update: Dell'Oro VP Jeff Heynen stressed that the impact on suppliers is not consistent across the board, and that it's possible that some cable access vendors could might bounce back sooner than the second half of next year. He noted that Harmonic, as a prime example, recently guided towards healthy revenue growth in the fourth quarter of this year and noted that its broadband segment could set a record.
Broader impact
A spending slowdown spurred by high inventory levels is not focused solely on cable access – it's hitting other parts of the broadband access market. According to Dell'Oro, total global revenue for the broadband access equipment market dipped 14%, to $4.1 billion, in Q3.
Dell'Oro said spending by North American operators dropped 26% versus last year as some Tier 1 providers hit the pause button. But the negative trend is reaching into other parts of the globe.
"The inventory alignment that began in North America has now migrated to Europe and Latin America, as both regions saw significant Y/Y declines in equipment spend," Heynen said in a statement.
Fixed wireless consumer premises equipment (CPE) was a bright spot in the quarter as shipments rose 1% from the prior quarter, driven by indoor 5G sub-6GHz units, according to Dell'Oro.
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