Cable network upgrade spending set to peak in 2028 – Dell'OroCable network upgrade spending set to peak in 2028 – Dell'Oro

Cable network upgrade spending will rebound a bit in 2025 and peak in 2028, according to Dell'Oro's latest five-year forecast. Evaluations of and accessibility to new 'unified' DOCSIS 4.0 chips are partly to blame for near-term delays.

Jeff Baumgartner, Senior Editor

January 30, 2025

4 Min Read
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Cable's network upgrade path has been saddled with fits and starts in recent years as various operators started to pursue one angle, then pivoted to another. Meanwhile, others delayed projects due to the introduction of new technologies or adjusted spending priorities.

In recent market action, some cable operators have taken a closer look at upgrading their DOCSIS 3.1 networks, a scenario that threatens to push out a future move to DOCSIS 4.0 or cause some companies to more closely consider an ultimate leap to fiber-to-the-premises (FTTP).

Shifting spending priorities have also entered the scene. A notable example is Charter Communications. The operator initially outlined a multi-phased plan to upgrade its hybrid fiber/coax (HFC) networks in the 2025 timeframe, but a greater near-term focus on fiber buildouts in rural areas and other priority adjustments factored into its decision to extend that timeline to 2027.

Cable network spending will likely also take a breather following a decision announced last fall to extend access to a new set of "unified" DOCSIS 4.0 chipsets from Broadcom for nodes, amplifiers and gateways/modems to the full industry of operators and suppliers. While many suppliers that had been on the outside looking in on unified D4.0 were pleased with that decision, it is likewise creating a slowdown as products powered by those chips start to seep into the market and as operators take time to reevaluate their upgrade plans.

Related:Cable network spending is set for a rebound

"I don't think there's any doubt in my mind that cable operators are going to slow down these major DAA [distributed access architecture] projects to get unified chips for nodes and CPE and standardize on that going forward," said Dell'Oro VP Jeff Heynen.

Five-year forecast

So where does that leave things? The expectation is that spending on cable network upgrades will rebound a bit this year, though not at the pace that the industry saw years ago when operators were upgrading to DOCSIS 3.1 en masse. But spending on cable tech is anticipated to peak in 2028, Dell'Oro Group predicts in its latest five-year forecast for the wider broadband access market.

Dell'Oro now expects revenue for cable distributed access architecture (DAA) equipment and products, such as virtual cable modem termination systems, remote PHY and remote MACPHY devices, and remote optical line terminals (OLTs), to peak at $1.3 billion in 2028 as operators pursue D4.0 upgrades and "early fiber deployments."

That will put cable infrastructure spending at a pace not seen since 2018 (around the DOCSIS 3.1 upgrade buildup), but the overall level of spending will be lower, Heynen explained. That's partly because operators are moving at different paces and taking a more fragmented approach to upgrades – some are going with fiber, others with DAA and DOCSIS 4.0, and still others want to squeeze all they can out of legacy cable modem termination systems (CMTSs).

Related:DOCSIS infrastructure spending rebounds in Q3

'Shift of spend'

Heynen said the recent success of fixed wireless access (FWA) competition is also contributing to a prolonged upgrade cycle as consumers gravitate to lower-priced options that don't deliver gigabit-class speeds.

That is causing "a shift of spend," he noted, as operators emphasize investments in other areas that can help them differentiate. Rather than putting a laser-like focus on speeds and feeds, that focus is extending into areas such as service reliability and uptime and rapid responses to outages. That kind of emphasis is less about capacity and more about new software tools that make the network more resilient, Heynen said.

The bigger broadband picture

Dell'Oro's five-year forecast expects broadband equipment spending to peak at $19.2 billion in 2028, and to grow 0.8% over the full period (2024-2029).

Notably, Heynen's current view also represents a reduced forecast amid ongoing evaluation of the pull-through on broadband that occurred in the early phases of the COVID-19 pandemic and its negative impact on supply chains. He noted that the prior version of his five-year forecast issued in July 2024 anticipated five-year growth of around 1.1%, and the one before that (from January 2024) anticipated five-year growth of 3%.

Among other broadband access categories, Heynen expects PON equipment revenue to climb from $10.5 billion in 2024 to $12.1 billion in 2029. That will be driven by XGS-PON deployments in regions such as North America, Europe, the Middle East, Asia, the Caribbean and Latin America, and fiber-to-the-room and 50 Gbit/s deployments in China, he said.

About the Author

Jeff Baumgartner

Senior Editor, Light Reading

Jeff Baumgartner is a Senior Editor for Light Reading and is responsible for the day-to-day news coverage and analysis of the cable and video sectors. Follow him on X and LinkedIn.

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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