Cable network spending set to rise in 2024 – Dell'Oro

Broadband access equipment spending will be a bit of a mixed bag in 2024.

While overall spending in 2024 will drop slightly from 2023 levels, sales activity is expected to accelerate in the second half of the year. Meanwhile, cable-related infrastructure spending is expected to climb for full-year 2024, setting up another growth run in 2025, according to a new forecast from Dell'Oro Group.

Dell'Oro Group expects broadband access equipment sales to decline by 1% in 2024 versus 2023, with the first half of 2024 seeing continued weakness followed by a surge in spending in the second half of the year. The first half of 2024 will continue to see some of the inventory corrections that marked a tough 2023 that saw a spending decline of 8% to 10%, Dell'Oro VP Jeff Heynen explained.

"Although the inventory corrections seen in 2023 will continue through the first half of 2024, the second half of the year is expected to be the turning point towards renewed growth," he said. "Service providers still have the same goals of increasing their fiber footprint, increasing the bandwidth they can offer their customers, and improving the reliability of their broadband services through the distribution of intelligence closer to subscribers."

Cable infrastructure spending to perk up

Related:Broadband operator spending to pick back up in 2024... or later

Meanwhile, cable infrastructure spending should enjoy a solid 2024, with increases in the neighborhood of 7%, Heynen said. That growth rate could've been even more, but expectations for 2024 were tempered a bit by Charter Communications' announcement that the timeline for its ambitious hybrid fiber/coax (HFC) network has been pushed out to 2026.

Heynen said he expects cable infrastructure spending to be relatively strong in 2024 as well as 2025 as operators push ahead with network upgrades that include a move to a distributed access architecture (DAA) along with rollouts of remote OLTs (optical line terminals).

He expects spending for cable distributed access equipment – including virtual cable modem termination systems, remote OLTs and remote PHY and remote MACPHY devices – to reach just over $1 billion in 2024, and eventually climb to about $1.3 billion by 2028.

Among other access categories, Heynen expects PON equipment revenue to grow from $10.8 billion in 2023 to $11.8 billion in 2028, fueled by XGS-PON deployments in multiple regions. He expects XGS-PON spending to dominate the category through the end of the decade.

He also expects revenues for fixed wireless access (FWA) customer premises equipment (CPE) to hit $2.2 billion in 2025, and reach $2.5 billion by 2028, led by shipments of 5G sub-6GHz technology along with growth in 5G millimeter wave units. After FWA deployments by T-Mobile, Verizon and AT&T start to run out of steam in 2025 or 2026, Heynen believes the FWA use case will pick up in regions such as Europe.

Related:Charter pushes HFC upgrade timeline to 2026 as rural builds accelerate