Outside plant upgrades in 2020, including optical node splitting and segmentation to support sharp increases in both broadband consumption and new subscribers will open the door to increasing DOCSIS channel purchases in 2021 and beyond, with 2022 expected to nearly match 2018’s record year for channel licenses.
According to Dell'Oro Group's recently-published five-year forecasts for broadband access equipment, cable operators will continue to focus on the following strategic initiatives through 2025:
• Quickly improving upstream capacity through mid-split and high-split upgrades, resulting in positive year-over-year increases in upstream channel license purchases through 2025.
• Replacing legacy optical nodes that have reached maximum segmentation with DAA nodes.
• Deploying DAA nodes and modules to improve signal quality and overall capacity.
• Migrating to virtualized CCAP platforms both for remote PHY deployments but also to cap and grow traditional centralized CCAP platforms.
• Replacing aging amplifiers, taps, and other passives to begin the process of preparing networks for DOCSIS 4.0.
The COVID-19 pandemic didn’t change these strategic initiatives, aside from shifting the timelines for completion. Cable operators, as they are known to do, spent conservatively and judiciously throughout 2020, focusing on addressing bandwidth hot spots and using the features of DOCSIS 3.1 (e.g. OFDM-A) to handle the spikes and surges in traffic seen in both the spring and the fall.
Additionally, the glut of DOCSIS channel capacity that helped push down cable equipment revenue in 2018 and 2019 was actually beneficial to operators in 2020 as they were able to address significant increases in both upstream and downstream traffic during the pandemic with minimal increases in spending.
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With the restrictions and lockdowns from 2020 carrying into the first half of 2021, cable operators will once again be forced to balance managing capacity and subscriber growth with an uncertain macroeconomic environment. But the strategic initiatives mentioned above plus a gradual return to normalcy by the end of the year will push overall infrastructure spending up a modest 3%, with spending on virtual CCAP platforms seeing the largest year-over-year jump.
2022 will see a more significant revenue increase of 11%, as the DOCSIS 4.0 prep work, combined with continued DAA rollouts and more mid- and high-split projects result in a solid increase in spending across the board. The biggest product beneficiaries are expected to be remote PHY nodes, remote MACPHY nodes, and vCCAP platforms.
Jeff Heynen is senior research director for broadband access and home networking at Dell'Oro Group. He joined Dell’Oro Group in 2018, and is responsible for the broadband access and home networking market research program. While at the firm, Heynen has expanded the broadband access and home networking coverage areas. Heynen’s research and analysis has been widely cited in leading trade and business publications. Heynen is a frequent speaker at industry conferences and events, including Broadband World Forum, CES, FoE Japan, FTTH Conference, and the SCTE Cable-Tec Expo. He can be reached at [email protected]; follow him @JeffHeynen.
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