Cable network vendors are bracing for a tough 2019 as cable ops mull over how they will migrate to a distributed access architecture (DAA), but relief is expected to follow as deployments begin to kick in during the subsequent years, according to a new forecast from the Dell'Oro Group.
Those DAA-related investments will push sales of cable infrastructure to $2 billion in 2023, up from $1.5 billion in 2019, thanks to the cash being splashed on remote PHY and remote MAC PHY devices, the research firm said in its latest five-year broadband access forecast.
That revenue forecast includes a mix of cable access network products, including integrated converged cable access platforms (CCAPs), virtual CCAPs, as well as a new class of fiber-connected nodes that are key to coming DAA deployments. By pushing more electronics and functions toward the edge of the network and deepening the digitization of the network, DAA will likewise spread out and reduce cable space and power requirements, pump up network capacity and help to pave the way toward symmetrical multi-gigabit speeds with Full Duplex DOCSIS and the cable industry's broader "10G" vision.
Jeff Heynen, research director at the Dell'Oro Group, acknowledged that the rise in these revenues aren't a monster jump, but does represent incremental growth for vendors that will become more pronounced in 2020.
That's certain to be welcome news to suppliers, which are expected to struggle this year and operate, to a degree, in limbo as some MSOs push off larger purchases while they decide when and how to make the migration or cutover to DAA. Some of those decisions are being made as cable operators split nodes.
That process "is impacting purchases of traditional equipment right now," said Heynen, who will present more data and findings next month at Light Reading's Cable Next-Gen Technologies & Strategies event in Denver.
"I don't think it's going to last long. The capacity requirements are still there," Heynen added, noting that MSOs will still be in the market for DOCSIS 3.1 line cards. "But that decision is probably what will put a ceiling on the overall market this year. The DAA transition is underway today; it's just happening on a limited basis."
And the $2 billion projection is significant in that the total CCAP market has never exceeded $1.5 billion. The increase in revenues, Heynen points out, comes as MSOs touch more parts of the access network with DOCSIS equipment as the network becomes less centralized. Cable nodes have typically been counted separately, but with DAA, they add DOCSIS and other capabilities and become part of that broader CCAP revenue equation.
Heynen also sees deployments of virtual CCAPs and virtual cable modem termination systems running a bit ahead of remote PHY nodes and shelves, viewing the latter as more of a cap-and-grow opportunity in the early going.
But the bigger trend will also create a bigger revenue pie for vendors to cut into. Though Arris, Cisco Systems and Casa Systems have led the integrated CCAP market, the DAA migration and the deployment of these new nodes will also open up doors for others that were never in that market or were never in there in a big way. Harmonic and Nokia are among other vendors in a position to gain in both mindshare and revenue share.
"This presents an opportunity for all those vendors," Heynen said.
But, given how 2019 is expected to shape up, that's an opportunity that likely won't be fulfilled until 2020 and beyond.
- Harmonic Touts Progress With Virtualized & Distributed Cable Network Deployments
- Casa's Q4 Sales Come in Light Amid MSO Spending Delays
- Comcast Eyes 'Scale Deployments' of Remote PHY in 2018
- CES 2019: Cable's 10G Tech 'Will Work'
— Jeff Baumgartner, Senior Editor, Light Reading