Cable access market rises as broadband CPE biz struggles in Q2 – Dell'Oro

Purchases of cable access network gear and software climbed again in the second quarter of 2021, thanks to ongoing node splitting activity and a boost in operator purchases of DOCSIS licenses and distributed access architecture (DAA) nodes, Dell'Oro Group found in its latest report on the broadband access and home networking market.

Total cable access "concentrator" revenues jumped 12%, to $247 million, versus the year-ago period, Dell'Oro said. The cable access concentrator category includes DOCSIS infrastructure elements such as converged cable access platform (CCAP) cores and chassis, virtual CCAP licensing, and DAA nodes and modules.

The Q2 results polished off a decent first half of 2021 for the market – revenues in the cable access concentrator sector rose 15% in Q1 2021.

Jeff Heynen, vice president of broadband access and home networking at Dell'Oro, said part of the recent revenue rise comes way of DAA-related sales activity, particularly for remote PHY devices (RPDs) and, to a lesser extent, for remote MACPHY devices (RMDs). With DAA, cable operators are shifting away from legacy, centralized CCAP architectures by pushing key elements and functions of the network toward the edges. DAA is also a requirement for DOCSIS 4.0, a next-gen set of CableLabs specs that supports multi-gigabit speeds on the industry's widely deployed hybrid fiber/coax (HFC) networks.

Heynen said RPD and RMD shipments reached about 26,000 units in the first half of 2021, up from about 18,000 in the year-ago period. "It's picking up," he said, noting that unit numbers were consistent during the first two quarters of 2021 and are expected to rise further during the second half of the year.

Those gains also represent further evidence that DAA and other strategic network moves that were put on the back burner by cable operators last year to deal with a surge in network capacity requirements seen during the early phases of the COVID-19 pandemic have moved up on MSO priority lists, he said. Heynen also believes some of the increase in DAA activity is due to operators maxing out what they can squeeze from node splits and now need DAA to further improve the performance of their HFC networks.

Harmonic pulls ahead of Cisco

As another subset of the cable access concentrator market, virtual CCAP activity is also on the rise. According to Heynen, revenue attached to vCCAP deployments have more than doubled in the first half of 2021 versus the first half of 2020.

Harmonic has been the recipient of much of that vCCAP action, helping the vendor to jump ahead of Cisco Systems to take the No. 2 spot in revenue share among cable access suppliers.

Harmonic represented 20% of that market in Q2 2021, trailing only CommScope (49%). Cisco was third with 15%, followed by Casa Systems (13%), according to Dell'Oro.

CPE supply chain struggles

Although the cable access market improved in Q2, the sledding remained tough for the broadband CPE market, as shipments dropped another 4% from Q1 2021 levels. Heynen said ongoing supply chain constraints is the primary culprit.

If this trend continues, access to the latest, greatest CPE devices could be curtailed, perhaps forcing some cable operators to reach back into their inventory of older devices to turn up a portion of their new broadband subscribers, Heynen explained.

Back to the network, Dell'Oro said total PON optical network terminal (ONT) unit shipments exceeded 35 million for the second time in three quarters.

Heynen said much of the action there is coming from tier 1 and tier 2 operators. He sees the impact of stimulus programs such as the fiber-focused Rural Digital Opportunity Fund (RDOF) to start to pick up later in 2021.

"We're at the very, very early stages of any RDOF work," he said. "Most of that will come next year and into the following years."

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— Jeff Baumgartner, Senior Editor, Light Reading