Dell’Oro Group analyst Jeff Heynen has revised his five-year forecast for global spending on broadband access equipment and CPE, and is now estimating that the market only dropped 2% in 2020.
Heynen’s latest estimate, highlighted in a Dell’Oro Group blog posting, revises a prediction made last summer that the market would drop 7%. In fact, this was Heynen's second revision of his 2020 forecast--pre-pandemic, in January of last year, he had the market dropping by 5%.
"The combination of significant residential subscriber growth and increased capacity utilization rates noted by global broadband providers nearly offset the negative impacts of trade tussles, component shortages, and labor limitations," Heynen wrote.
"In the first half of 2020, we heard from countless service providers that their projected capacity utilization rates for the entire year were reached by March or April,” he added. “A second surge in consumption in the fall, driven by children returning back to school and attempts at re-opening economies forced many operators to add even more capacity. With much of the world still dealing with the impacts of the COVID-19 pandemic and with remote work and online education continuing well into 2021, we see no slowdown in broadband capacity utilization, forcing service providers to once again balance accommodating traffic growth with managing overall spending."
For cable operators, Heynen said the ample DOCSIS channel capacity that spiked network access equipment revenue in 2018 and 2019 helped operators as they sought to address sudden spikes in both upstream and downstream usage.
“In most cases, cable operators used the software tools available as part of DOCSIS 3.1 to ensure adequate bandwidth for all subscribers. In other cases, operators purchased additional DOCSIS licenses as part of accelerated node split programs to address systems with the greatest need,” Heynen wrote.
“Regardless, after two years of under-investing in infrastructure, the overall cable infrastructure market will see a steady increase in revenue throughout our forecast period, as mid- and high-split projects in North America and Western Europe, designed to increase upstream capacity, are accelerated. Investments in outside plant equipment, particularly new amplifiers and taps, will also continue as operators begin the multi-year process of preparing their networks for DOCSIS 4.0 and its ability to enable extended spectrum DOCSIS (ESD), low-latency DOCSIS, and full-duplex DOCSIS (FDD),” Heynen added.
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