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Cable access network spending dropped 30% in 2019 – Dell'Oro

If you're a cable access vendor, 2019 was likely a year to forget.

Total "cable access concentrator" revenue declined 30%, to $255 million, in 2019, according to Dell'Oro. That decline was driven by a confluence of factors, including a slowdown in capacity purchases across all regions, some indecision about next-gen network designs and a general lack of broadband competition, said Jeff Heynen, Dell'Oro's senior research director, broadband access and home networking.


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Dell'Oro's cable access concentrator category includes DOCSIS infrastructure elements, including Converged Cable Access Platform (CCAP) cores and chassis, virtual CCAP licensing and distributed access architecture (DAA) nodes and modules.

Some increased spending by major MSOs such as Charter Communications and Comcast in Q4 2019 versus the prior quarter helped out vendors such as Casa Systems, but it wasn't enough to produce an improved quarter let alone a better full 2019.

For full-year 2019, the total cable access concentrator market dropped to just over $1 billion, compared to $1.6 billion in 2018, and $1.7 billion in 2017, Heynen said.

Some of that drop was due to the completion of DOCSIS 3.1 network upgrades by major MSOs such as Charter and Comcast. The combined spend by the two largest US MSOs on scalable infrastructure for Q4 2019 was $1.2 billion, versus $1.5 billion in Q4 2018. Their combined spend in that category for all of 2019 was $3.4 billion, down from $4.8 billion in 2018.

Charter and Comcast aren't the only MSOs driving this downward trend, but they do head up a good chunk of the market. "It's hard to recover from that if you're a vendor," Heynen said.

DOCSIS 3.1 network upgrades have put cable operators in position to offer 1Gbit/s speeds, at least in the downstream direction. That's been enough to keep cable operators ahead of or at least in line with telco competition in most markets, a scenario that has reduced incentives to boost network capacity spending, Heynen said.

Heynen doesn't envision a big rebound in 2020 – he expects spending to be flat or up as much as 3% to 4%.

Upstream hope
But he does expect moves to expand upstream bandwidth to help lead the next network investment cycle as cable operators deploy mid-splits or high-splits that expand the amount of bandwidth used for upstream traffic. In most legacy North American DOCSIS networks, the spectrum dedicated to the upstream is in the range of 5MHz to 42MHz. Mid-splits will raise that to 85MHz and high-splits could elevate it to around 200MHz.

Those upstream-impacting network decisions will also help to drive a new generation of DOCSIS consumer premises equipment (CPE) that can tune to these updated upstream/downstream bandwidth splits.

Prepping for that has had a positive effect on DOCSIS 3.1 CPE shipments, which surged 67%, to 6 million units, in 2019, according to Dell'Oro.

But there are other things driving that increase in shipments. For one, the price points between high-end DOCSIS 3.1 CPE and DOCSIS 3.0 CPE have narrowed considerably. Additionally, the latest lines of DOCSIS 3.1-powered gateways also come equipped with Wi-Fi 6. "That is enough incentive as well to drive this transition to DOCSIS 3.1," Heynen said.

PON OLT shipments a bright spot
Meanwhile, PON OLT equipments were the lone bright spot in Dell'Oro's latest broadband access report, finding that revenue for that equipment category rose 16%, to $3 billion, in 2019. As a subset of that category, XGS-PON OLT port shipments jumped 222% as more operators continued to shift to 10Gbit/s FTTP networks, the firm found.

Some of that XGS-PON activity is due to work in North America by Frontier and AT&T, which now has XGS-PON tech deployed in 40 US cities. Meanwhile, overall PON activity has been aided by Verizon's expansion of existing service areas, and in Europe where operators are shifting from copper to fiber. The trend is also being fueled by privately funded firms like Zzoomm and CityFibre in the UK that are forcing incumbents such as BT to move more quickly to fiber and away from tech like Gfast, Heynen said.

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— Jeff Baumgartner, Senior Editor, Light Reading

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