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Cable Access Market Stays Soft in Q2: IHS

Softness in the cable broadband access market continued into the second quarter of 2015, as global revenues dropped 2% versus the previous quarter, IHS said in a new report that keeps track of spending for cable modem termination systems (CMTSs), edge QAMs, the Converged Cable Access Platform (CCAP), and coaxial media converters (CMCs).

IHS said revenues for that product group totaled $465 million in Q2 2015, while DOCSIS channel shipments in North America dropped 25% after rising 13% in the previous quarter. “[R]evenue was also down 19 percent due to a slowdown among a handful of larger operators,” IHS said

On the brighter side, global revenues in the second quarter actually rose 12% on a year-over-year basis. Additionally, spending on CCAPs, high-density, lower power consumption chassis that combine the functions of the CMTS and edge QAM, grew 34% in the first half of 2015 versus the prior year period (see chart). 

Operators spent heavily in the second half of 2014 and are now in the process of getting those products and that additional channel capacity deployed, Jeff Heynen, IHS’s research director for broadband access and pay TV, explained.

He noted that the effect of potential mergers (Charter Communications’ pending acquisitions of Time Warner Cable and Bright House Networks, for example) “did have some impact on purchasing, especially in North America.”

IHS also expects spending to pick up in the second half of 2015. Heynen added that the market is still waiting for the cBR-9, Cisco Systems’ new CCAP, and expects volume to pick up once that product becomes more widely deployed.

Heynen said slowness in the first half of the year will cause pent up demand and see shipments pick up in the fourth quarter as operators “go gangbusters on buying new cards and new licenses.”

He is also seeing some steady growth in the coax media converter market, which is picking up some steam in China and other emerging cable markets in the Asia Pacific region. That product category, now part of the overall Cable DOCSIS specifications, is opening up a total addressable market that will primarily benefit China-based suppliers such as Huawei and Sumavision. CMC product revenues represents 6% of the market in Q2 2015, up from less than 3% of the market a year ago, according to Heynen.

On the vendor front, Arris led the cable broadband access market in Q2 with 54% share of revenues, followed by Cisco (21%) and Casa Systems (15%), according to IHS.