Global PON equipment expenditure will grow steadily to 2025
August 13, 2021
Dell'Oro group, a market research company, recently released its five-year forecast report on the global broadband access and home network market on its official website. The report believes that global broadband spending will not stagnate as previously expected, but will grow steadily.
Continuous user growth and bandwidth consumption are still catalysts
From 2020 to 2025, the global broadband access equipment and CPE expenditure is expected to achieve a compound annual growth rate of 3%, which has a stable growth compared with the 0% compound annual growth rate in the January 2021 forecast version of the agency. Global broadband providers said that the combination of the continuous growth of residential users and the improvement of capacity utilization would be enough to offset the negative impact of component shortage and labor constraints.
As the delta mutant continues to affect employees returning to the office and students returning to campus for study, broadband users continue to grow at an alarming rate all over the world. Even if the user growth slows down later this year, the broadband penetration and broadband service provider market have expanded significantly in the past year. The growth of users has increased the revenue and gross profit margin of broadband service providers. Therefore, broadband equipment suppliers are promoting some of their upgrade projects, including the transition from copper to optical fiber.
After the investment level of broadband operators increases in 2020, it is expected that the decline in expenditure in 2021 will not become a reality. In fact, as operators cope with the increasing number of users and competitors and increase their investment in optical fiber, hybrid optical fiber coaxial cable and fixed wireless network, the expenditure will continue to grow this year.
PON equipment expenditure is expected to remain stable
The five-year compound growth rate of PON equipment has increased again from 3% to 5%. The Chinese market accounts for 65% ~ 80% of the total expenditure of the global PON market, and has reached the peak in the total unit of ont consumed every year. China's FTTH market has matured, and the broadband penetration rate is close to 80%. Although the growth of users is slowing down, a large number of users still need new optical network terminals.
Although the number of optical network terminals in China will decline compared with the peak in 2017 and 2018, it is expected to grow further in the rest of the world, especially in North America and Western Europe. In North America, the FCC's $20b rdof (rural Digital Opportunity Fund) plan will help a large number of rural broadband transition from copper to optical fiber in the next 5-7 years. In Western Europe, major operators such as orange, DT, BT openreach and proximus are expanding optical fiber deployment, and even rapidly turning to xgs-pon (commercial symmetrical 10g GPON) to provide 10g PON services. In Asia, 10g upgrading measures in India, Indonesia, Malaysia, Japan and South Korea also help to maintain the market.
Cable infrastructure spending will grow
The novel coronavirus pneumonia (DOCSIS) (cable cable data service interface specification) helped to reduce cable investment in 2018 and 2019, and in fact, it benefits broadband operators in 2020 because they can cope with the significant increase in upstream and downstream traffic with the smallest expenditure during the new crown pneumonia outbreak. In most cases, cable operators use some software tools in DOCSIS 3.1 to ensure sufficient bandwidth for all subscribers. In other cases, the operator purchased additional DOCSIS licenses as part of the accelerated node splitting plan.
In any case, after two years of insufficient infrastructure investment, the revenue of the whole cable infrastructure market will grow steadily in the forecast period, because the medium and high-end projects in North America and Western Europe are increasing the capacity and rate of network uplink. As operators begin to prepare networks for DOCSIS 4.0 and its ability to implement spread spectrum DOCSIS (ESD), low delay DOCSIS and full duplex DOCSIS (FDD), their investment in external plant equipment, especially new amplifiers, will continue.
