Revenue for companies specializing in cable network access technology fell 40% to $237 billion in the second quarter, worsening a 38% decline in Q1, according to a new Dell’Oro Group report.
“I don’t think spending improves significantly until [operators] feel there is a viable competitive threat to their 1Gig DOCSIS 3.1 services or an application or service that challenges the capacity they have in their access networks now,” Dell’Oro Group analyst Jeff Heynen said in an email to MCN.
“I think we all have to keep in mind that many of the largest operators have been on a consistent 6-year cycle of purchasing and deploying capacity as they move from DOCSIS 2.0 to 3.0 and 3.0 to 3.1. At some point, that cycle had to stop, even for a little bit, for the operators to deploy all that capacity,” Heynen added.
With spending on 5G wireless upgrades and fiber-to-the-home, overall broadband access equipment sales increased 3% to $3.2 billion globally, according to Dell’Oro. Specifically, sales of XGS-PON OLTs increased 874% in Q2, and revenue from DOCSIS 3.1 CPE offset Converged Cable Access Platform spending declines.
The cable access sales are particularly slow in North America, where cable operators are slowing mulling complex movements to Distributed Access Architecture, as well as virtualization and myriad competing 10G-capable next-gen DOCSIS iterations.
“Again, the competitive need isn’t there at the moment,” Heynen said. “Of course, DAA is more about network efficiency than it is competition. But still, if there isn’t a pressing need, then there isn’t incentive to switch horses just yet.”