The cable broadband access equipment market took a nosedive in 2019, compounded further by the global coronavirus pandemic in 2020. But the market will rebound, eventually, thanks to next-gen access technologies.
There are two major segments to Omdia's latest cable broadband access equipment forecast. The non-next-gen equipment segment consists of traditional, centralized CMTS/CCAP equipment. The dominance of that legacy equipment declines over the forecast period. By 2025, traditional CMTS/CCAP gear will account for only 41% of total revenue, or almost $415 million, compared to over 90% of all cable broadband access equipment revenue in 2018. This shift reflects cable operators' capex investments in headend efficiencies, supported by the move to cloud-enabled CMTS/CCAP platforms and a distributed access architecture (DAA) approach.
The next-gen segment consists of cloud-enabled CMTS/CCAP, RPD/RMD devices and shelves, as well as digital fiber nodes. Collectively, these technologies represent a transformation from traditional HFC network infrastructure housed in cramped, costly headends, towards an orchestrated, re-allocated architecture. Previously siloed aspects of the networks can be flexibly combined and supported by cloud and software provisioning. The next-gen equipment segment will reach $585 million in 2025, as shown in Figure 1.
Regarding DOCSIS 4.0, the final specifications were released by CableLabs in March. But chipset availability is still years away. Omdia forecasts that DOCSIS 4.0 equipment shipments will begin in 2023, with commercial upgrades starting in 2024. Some cable operators will be eager to implement DOCSIS 4.0, enabling higher bandwidth, while others will be content with the capabilities of their relatively recently upgraded DOCSIS 3.1 networks.
Distributed access equipment will evolve from nascent to commercial revenue streams
In the post-pandemic years, many broadband-focused cable operators will move toward DAA, not only to drive opex efficiencies in the headend, but also to move their networks toward end-to-end automation and control.
Operators have been slow to adopt equipment in this segment, due in part to indecision over next-gen DOCSIS migration paths (Node+0 vs. Extended Spectrum DOCSIS), which impacts outside plant strategy. This market slowdown has been compounded by the global pandemic in 2020. With DOCSIS 4.0 specifications now set, Omdia expects DAA revenue to begin to materialize in 2021.
North America remains on top for cable access equipment shipments
Throughout the forecast period, North America will continue to account for the largest percentage of cable broadband access equipment shipments. North America is different from other regions, with more than 60% of broadband subscribers receiving services via cable modem. North American cable operators will continue to improve their HFC networks by carrying out spectrum upgrades, shifting to cloud-enabled CMTS/CCAP and pushing fiber deeper into the outside plant.
In EMEA, beginning in late 2019 and into early 2020, DOCSIS 3.1 upgrades were underway by operators as the global pandemic took hold of the region. Omdia expects a downtick in the short term; however, post-pandemic cable upgrades will resume in the region, particularly in Western Europe. Several large cable operators in the region are focused on cloud-enabled CMTS/CCAP upgrades.
In Asia and Oceania, several cable operators will shift to PON networks during the forecast period to stay competitive, while others will continue to invest in their coax networks, offsetting a regional decline. China will continue its focus on building vast PON access networks throughout the country.
In Latin America and the Caribbean, the centralized CMTS/CCAP segment will remain strong. While there will be a shift to DAA in the region, various concerns, such as outside plant security, may keep the plant more consolidated.
Cable broadband access market will keep growing into the 2030s
As the cable broadband access equipment market regains strength post-pandemic, cable operators will resume efforts to transform existing networks to remain competitive against rival fiber offerings and keep up with customer bandwidth demands, whether in normal or stay-at-home conditions. By adopting cloud-enabled headend equipment along with distributed access equipment, cable operators can become more agile and disaggregated, moving toward automation and virtualization. This transformation will take time and the migration path will depend on several factors, including the regional competitive landscape and customer demand.
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— Jaimie Lenderman, Senior Analyst, Service Provider Network, Omdia