Dell’Oro latest forecast, the next five years, global broadband network spending will climb steadily. The reasons for the growth include the ongoing construction and upgrading of the fiber optic network and CATV operators planning to upgrade the network.
ICC News Dell’Oro’s latest forecast shows that global broadband network spending will climb steadily in the next five years, partly due to ongoing fiber network construction and upgrades. The cable television (CATV) industry plans to upgrade its networks to support virtualization and distributed access architectures and, in some cases, DOCSIS 4.0, which will also help increase broadband spending. Fixed wireless premises equipment (CPE) will also contribute, but growth in this segment is expected to slow over the next few years.
PON equipment revenue is expected to grow from $11 billion in 2022 to $13.2 billion in 2027, driven by North America, EMEA (Europe, Middle East, and Africa), and CALA (Caribbean and Latin America) regions, Dell’Oro said XGS-PON deployment.
PON spending is expected to increase as DSL spending continues to decline, a shift that could affect about $1.8 billion in equipment spending in North America, said Jeff Heynen, vice president of Dell’Oro. He expects upgrades and buildouts of older copper infrastructure to help drive higher PON spending. Still, most PON spending growth (about 70%) is related to network expansion and other fiber expansion projects.
CATV Operator Spending Levels Rise
Following a slowdown in recent years, Dell’Oro expects cable access network spending to recover to about $1.5 billion by 2027, thanks partly to DOCSIS 4.0 upgrades and FTTP deployments. Heynen explained that cable access network spending peaked at about $1.7 billion in 2017, compared with only about $1 billion a year in 2019 and 2020.
He said that deploying the virtual cable modem termination system (vCMTS) and the introduction of distributed access fabric would promote the growth of Cable access spending, which will also promote the upcoming DOCSIS 4.0 network upgrade.
Another piece of the pie is the emerging adoption of remote OLTs (Optical Line Terminals), which can be deployed in distributed access nodes to support FTTP deployments. Comcast has already walked very well on the road of this new generation of HFC network. Other companies, such as Charter Communications, are stepping up their efforts to pursue a similar deployment model.
While cable network spending will continue to grow, Heynen expects it to grow slower than it did during DOCSIS 3.0 and DOCSIS 3.1, which focused on purchasing and deploying centralized CMTS chassis and line cards. “You’re talking about a new architecture, including remote OLT, virtual CMTS, and remote PHY. It’s going to take longer to implement,” he noted.
Heynen also expects cable access network spending to continue to climb after 2027 as other operators join in.
FWA CPE Spending will Drop
Dell’Oro expects the FWA CPE segment to drive $2.2 billion in spending by 2027, down from $3.2 billion in 2022.
Heynen expects FWA CPE spending to remain stable through 2024 but notes that some service providers may experience capacity issues that inhibit growth while facing stiffer competition from fiber and newly upgraded HFC networks. Those issues put a ceiling on fixed wireless growth, he said.
While T-Mobile and Verizon are driving FWA growth, Heynen wonders what the future holds for the growing WISP (wireless ISP) industry. As WISPs pursue government subsidy opportunities, some may need to consider licensing spectrum or transitioning to fiber within their footprint. Many WISPs are doing this, Heynen said.