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Report: Broadband-Access-Gear Revenue Dwindles

8/02/2006 5:02 AM Eastern

Bad news potentially for broadband-access-equipment vendors: Combined revenue for broadband cable, digital-subscriber-line and fiber-to-the-home network gear and customer-access equipment is near its peak, according to a new report issued by the Dell'Oro Group.

The Redwood City, Calif.-based analyst firm is predicting that the total revenue for access controllers and customer modems will top out at $9.1 billion this year and gradually fall to $8.2 billion by 2010. By then, the revenues will be less than market values in 2005.

The reason for the decline is that broadband-subscriber additions will peak this year, and service providers are already starting to focus on upgrading their access networks rather than buying equipment to support new subscribers.

"We expect telecom-service providers and cable operators will have very different reasons for upgrading their networks after 2006," said Tam Dell'Oro, founder of Dell'Oro Group. "Telecom-service providers will need additional network bandwidth to offer TV services -- the last component of their triple-play offering. On the other hand, cable networks currently have sufficient capacity to handle voice-video-data services. Despite this, cable operators will continue to upgrade their networks in order to be able to offer comparable bandwidth to their competitors.”

September