While a rising tide of government spending and competition may float all broadband boats, spending increases on broadband equipment won’t last forever. In a new report, Dell’Oro Group predicts that revenues will peak at $18 billion in 2024 before starting to decline.
“Between national broadband plans, public subsidization, and private equity, spending on broadband infrastructure will see sustained growth through 2024, and will remain strong through 2026,” explained Jeff Heynen, vice president at Dell’Oro Group. “Competition for broadband subscribers is heating up everywhere, fueling the need for operators to invest heavily in their access networks.”
The current catalysts will spark increased spending for PON equipment, cable broadband access equipment, and fixed wireless CPE – all of which will see overall spending growth from 2021 to 2026. Outlays on PON gear for fiber to the home (FTTH) – much of it on XGS-PON deployments in North America, Europe/Middle East/Africa (EMEA), and Caribbean and Latin America – will increase from $8.3 billion in 2021 to $9.8 billion in 2026, Dell’Oro forecasts. Cable distributed access equipment (including virtual CCAP, Remote PHY devices, and Remote MACPHY devices) spending should increase from $275 million in 2021 to nearly $900 million by 2024, according to Heynen, as cable MSOs deploy DOCSIS 4.0 technology. Even after the overall broadband network peak, Heynen expects operators to continue spending increases, leading the cable distributed access equipment market worldwide to be worth around $1.3 billion, Heynen told BTR.
Fixed wireless access is expected to remain a strong option for service providers during the forecast period, according to Dell’Oro. Spending on such CPE should reach $2.8 billion by 2026, according to the report, with 5G sub-6GHz and 5G millimeter-wave units in the lead.
However, once the overall broadband market reaches its 2024 peak, Heynen says that revenues will decline 2% in both 2025 and 2026.
Dell’Oro’s Broadband Access 5-Year Forecast Report provides an overview of the broadband access market with tables covering manufacturers’ revenue, average selling prices, and port/unit shipments for cable, DSL, PON, and fixed wireless equipment. Covered equipment includes Converged Cable Access Platforms (CCAP), Distributed Access Architectures (DAA), DSL Access Multiplexers (DSLAMs), PON optical line terminals (OLTs), customer premises equipment (for cable, DSL, PON, and fixed wireless applications), along with residential WLAN equipment, including mesh routers.