September 27, 2019
Excess network capacity of some major cable operators mixed with some indecision about next-gen network plans were a recipe for a tough Q2 for the cable access market.
Total "cable access concentrator" revenues dropped 40%, to $237 million, in Q2 2019 compared to the year-ago period, according to Dell'Oro Group. That category is an aggregation of traditional Converged Cable Access Platform (CCAP) products and newer classes of Remote PHY and Remote MACPHY devices and virtual CCAP (vCCAP) products.
The drop in traditional CCAP spending is having the biggest impact and is not being completely offset by the growing but still relatively small market for vCCAP and distributed access products, according to Jeff Heynen, research director, broadband access and home networking, at Dell'Oro. That, in turn, has put pressure on the main CCAP suppliers -- CommScope/Arris, Cisco Systems and Casa Systems.
Heynen said the overall drop in revenues largely stems from slowdowns at Comcast and Charter Communications, which have both completed their respective DOCSIS 3.1 network deployments. Both MSOs have been investing in capacity for six to seven years and were "bound to take a break" as the demand for capacity, particularly in the downstream direction, slowed down, he said.
Other cable operators are still buying capacity and upgrading their networks to D3.1, but their contributions don't move the needle as much as the two largest US cable operators, he added.
Additionally, indecision about where to go next with the access network was a "contributing factor" in Q2," Heynen said.
Some operators are taking a bit of a pause as they formulate next-gen plans involving distributed access architectures and the virtualization of the access network.
Additionally, there's been some industry debate over whether to adopt Full Duplex DOCSIS (FDX), a technique favored by Comcast that combines upstream and downstream traffic on the same block of spectrum, and Extended Spectrum DOCSIS (ESD), a method that would raise the spectrum ceiling to 1.2GHz and higher but continue to split the spectrum dedicated to upstream and upstream traffic. Much of that work, primarily targeted at beefing up cable's historically feeble upstream, appears to be resolved as both FDX and ESD are poised to be part of DOCSIS 4.0, a new set of specs under development at CableLabs.
As that process has dragged on, it's likewise given MSOs more time to think about the path they want to take next, Heynen said.
The bigger picture
Meanwhile, overall global revenue for broadband access equipment rose 3% in Q2, to $3.2 billion, aided by a big year-over-year rise (874%) in XGS-PON optical line terminals, according to Dell'Oro.
DSL port shipments also rose 3%, as VDSL Profile 35b ports rose 29% and VDSL activity picked up in Europe among incumbent telcos, Heynen said.
Gfast port shipments climbed 42% in Q2 versus the year-ago period. But total Gfast shipments remain relatively small, at about 361,000 units, compared to VDSL ports, which are in the 6 million unit range, the analyst said.
— Jeff Baumgartner, Senior Editor, Light Reading
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