Sales of the hardware and software needed to underpin the global internet are projected to finish down 7% to $11.4 billion, in 2020 according to Dell’Oro Group, exceeding the research company’s initial projection of a 5% slide.
However, Dell’Oro also predicts that global spending on so-called broadband access equipment will rebound by around 5% in 2021. Global revenue was up 1% to $3.1 billion in the third quarter, Dell’Oro added.
So why in a pandemic year, when internet capacity is being pushed to the limit, is spending on broadband access technology by cable operators and other internet service providers down?
For their part, cable operators over the previous several years made aggressive investments in DOCSIS 3.1 upgrades, ramping up to meet marketing benchmarks, such as 1-gig download speeds, and ending up with a lot of excess capacity.
During the pandemic, these MSOs have been able to rise to significant increases in downstream and upstream usage demand, in many cases simply using the tools and tweaks enabled by the DOCSIS 3.1 gear they had recently purchased.
Node splits and other investments in existing converged cable access platforms (CCAP) have resulted in operators postponing planned transitions of their networks to software virtualization and distributed access architecture (DAA). But cable operators are mostly out of additional capacity and will need to go through with these upgrades in 2021, Dell’Oro predicts.
Meanwhile, in terms of fiberoptic network equipment, Dell’Oro said that China, while nearly saturated with fiber-to-the-home deployments, will soon require significant optical network terminal (ONT) upgrades.
Because of the pandemic, and how it has revealed the necessity for global broadband capacity, Dell’Oro upgraded its five-year compound average growth rate (CAGR) projection for broadband access equipment, from -2% to -0.9%.
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