Global spending on broadband access infrastructure and customer premises equipment is expected to drop 7% in 2020, dipping to $11.4 billion, research company Dell’Oro Group said Tuesday.
A report issued in January by Dell’Oro Group predicted only a 5% decline.
On the cable side, the steep pandemic-fueled increase in consumer broadband demand has forced operators to seek immediate capacity increases through the purchase of additional DOCSIS licenses. But pursuing these node-split programs has come at a cost, said Dell’Oro Group Senior Research Director Jeff Heynen.
“In most cases, cable operators have used the software tools available as part of DOCSIS 3.1 to ensure adequate bandwidth for all subscribers,” he wrote. “In other cases, operators have purchased additional DOCSIS licenses as part of accelerated node split programs to address systems with the greatest need. But all those investments in existing CCAP platforms have resulted in postponements of strategic DAA projects.”
Dell’Oro expects the global broadband access business to pick up by 5% in 2021.
The firm believes that the pandemic will influence operators over a five-year period to increase spending—it has upped its five-year compound annual growth rate (CAGR) projection from -2% in January to -0.9% in its latest July report.
“This improvement might seem counterintuitive, given the worldwide impact of the COVID-19 pandemic,” Heynen wrote. “However, the pandemic and its resulting orders to stay at home for work and education, have shown the world just how critical adequate broadband access is to the global economy. As a result, global initiatives to expand and improve broadband access are either underway or will be shortly. Nearly all service providers have said that they have reached their planned capacity utilization rates for the entire year in the first half of 2020. Thus, they will need to expand this capacity to maintain comfortable operating levels.”
Dell’Oro also increased its CAGR projection for passive optical network (PON) technology from 0% to just under 1%.
“Although China’s ONT volumes are coming down from the peak years of 2017 and 2018, additional growth is expected from the rest of the world—particularly North America and Western Europe,” Heynen said.
