North America PON revenue outpaces DSL declines in Q3, says Infonetics

PON equipment vendors may have seen a good revenue uptick in the third quarter of 2014, growing 1 percent sequentially due to GPON optical network terminal (ONT) sales in North America, but the overall global broadband aggregation equipment market (DSL, PON and Ethernet FTTH) declined sequentially in the third quarter of 2014 from the second quarter of 2014, to $2 billion, reports Infonetics.

The research firm said that the third quarter was a "mixed bag" for regional investment. While spending on broadband aggregation equipment rose in Asia Pacific and North America, it declined in EMEA and Caribbean and Latin America (CALA).

"PON (passive optical network) was the only broadband aggregation equipment category to grow in the third quarter of 2014 (3Q14), and it was up just 1 percent sequentially, led by 2.5G GPON ONT increases in North America," said Jeff Heynen, principal analyst for broadband access and pay TV at Infonetics Research. "From the year-ago third quarter, PON is up a nice 20 percent globally."

Heynen added that DSL aggregation equipment declined 6 percent sequentially as some regions increased spending while others "brake expenditures ahead of fourth-quarter budget flushes," but "fourth-quarter spending should increase solidly."

During the fourth-quarter 2014 season, North America will become a broadband market in a state of flux. A number of service providers will get their Connect America Fund (CAF) projects underway, while AT&T (NYSE: T) and other service providers threaten to delay broadband rollouts until the FCC provides more clarity on proposed net neutrality rules.

Leading the market in terms of vendors during the quarter were Alcatel-Lucent (NYSE: ALU), Huawei and ZTE.

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