Dell’Oro Group predicts the broadband equipment market will surpass $120 billion in cumulative spending between 2022 and 2027. The market research firm says sales of PON equipment for fiber-to-the-home deployments, cable broadband access equipment, and fixed wireless CPE will show a 0.2% Compounded Annual Growth Rate (CAGR) from 2022 to 2027. Service providers continue to expand their fiber and DOCSIS 3.1/4.0 networks, while also increasing the reliability and sustainability of their broadband access networks.
“After three consecutive years of tremendous broadband network expansions and upgrades, 2023 is expected to show a return to normalized levels of spending,” said Jeff Heynen, Vice President of Broadband Access and Home Networking research at Dell’Oro Group. “After 2023, spending is expected to increase through 2026 and 2027, driven by 25 Gbps and 50 Gbps PON, Fixed Wireless CPE, as well as DAA and DOCSIS 4.0 deployments.”
Labor markets are “still being challenged” and a number of fiber based network operators (AT&T, Altice USA, Frontier) have reduced their expansion plans and homes passed targets. “To close out 2022 we did see a significant uptake in equipment purchases, and what happened there was supply chains appeased. A lot of orders that had been on the books for a long time have been fulfilled.”
Network equipment vendors are working through that inventory they had built up while taking on “additional equipment purchases.
Additional highlights from the Broadband Access & Home Networking 5-Year July 2023 Forecast Report:
- PON equipment revenue is expected to grow from $11.8 B in 2022 to $13.3 B in 2027, driven largely by XGS-PON deployments in North America, EMEA, and CALA.
- Revenue for Cable Distributed Access Equipment (Virtual CCAP, Remote PHY Devices, Remote MACPHY Devices, and Remote OLTs) is expected to reach $1.6 B by 2027, as operators ramp their DOCSIS 4.0 and fiber deployments.
- Revenue for Fixed Wireless CPE is expected to reach $2.7 B by 2027, led by shipments of 5G sub-6GHz and 5G Millimeter Wave units.
- Revenue for Residential Wi-Fi Routers will surpass $5.2 B in 2027, owing to massive shipments of Wi-Fi 7 units.
“Which isn’t going to float to manufacturers until you know, late 2024, really into 2025,” he said. “I think in the interim, XGS-PON in the European market is certainly going to catch up. We’re also seeing considerable growth in XGS-PON deployments now in China.”
In Dell’Oro’s five-year forecast published in January, Heynen expected fixed wireless subscriber growth, particularly in North America, would “start to moderate” beginning in 2024, due to factors like “capacity issues and fiber expansion.”
Heynen has increased his revenue predictions for the fixed wireless CPE market – which he previously tipped would hit $2.2 billion in five years – and now predicts subscriber growth to continue into 2025.
“Part of that is because of the net reduction in homes passed for fiber,” he said. “In the meantime, fixed wireless will be able to cover more ground while the operators who are building out fiber kind of extend their overall deployment plans.”
Further, operators like T-Mobile and Verizon “are seeing fixed wireless as a way to secure broadband subscribers away from cable operators. The U.S. market is really dynamic in terms of how services can be marketed.”
The Dell’Oro Group Broadband Access & Home Networking 5-Year Forecast Report provides a complete overview of the Broadband Access market with tables covering manufacturers’ revenue, average selling prices, and port/unit shipments for PON, Cable, Fixed Wireless, and DSL 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 ([CPE] for Cable, DSL, PON, Fixed Wireless), along with Residential WLAN Equipment, including Wi-Fi 6E and Wi-Fi 7 Gateways and Routers. For more information about the report, please contact [email protected].
Dell’Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, enterprise networks, data center infrastructure markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, contact Dell’Oro Group at +1.650.622.9400 or visit www.delloro.com.