- Cable gear purchasing hit a record low in the second quarter, according to Dell’Oro
- Subscriber declines mean operators don’t need to buy as much CPE gear
- Operators are waiting for a widespread rollout of ‘unified’ DOCSIS 4.0 chips
The cable equipment market continues to slump. A fresh report from Dell’Oro found Q2 spending on cable gear, including DOCSIS infrastructure and customer premises equipment (CPE) declined 13% year-over-year, dropping to its lowest level since 2009.
Reasons for the decline aren’t too surprising, according to Dell’Oro Group VP Jeff Heynen. Cable operators are grappling with persistent broadband subscriber losses and they “don’t need to buy as many units as they previously had,” he told Fierce.
Charter and Comcast, which posted Q2 broadband losses of 117,000 and 226,000 respectively, are both chasing wireless as another avenue of customer growth. In the meantime, operators can use existing inventory as well as refurbished units to “satisfy current subscriber demands,” said Heynen.
Harmonic and Vecima are the two vendors that have been hit hardest by the purchase downswing, Heynen noted. But in Harmonic’s case, the company continues to rack up cable operator customers, announcing two new agreements this month with GCI and Midco.
Commscope, which is selling its cable access biz to Amphenol for $10.5 billion, has been less impacted, he said, as the vendor is “selling amplifiers, taps, nodes, and other passives on a large scale to major tier 1 operators.”
Cable's DOCSIS 4.0 waiting room
Operators are also waiting for a more widespread rollout of DOCSIS 4.0 CPE units, Heynen said, “even if they only plan to do DOCSIS 3.1 Extended.” The latter is essentially a hybrid approach that allows operators to deliver faster speeds without immediately upgrading their entire network to end-to-end DOCSIS 4.0.
The decline in cable infrastructure spend extends to equipment such as remote-PHY devices, virtual cable modem termination systems (vCMTS) and traditional converged cable access platforms (CCAPs). That’s because both operators and vendors want to see how “unified” DOCSIS 4.0 pans out, said Heynen.
As the name suggests, unified DOCSIS 4.0 is a technology that combines two different methods of reaching 10 Gbps speeds: Extended Spectrum (ESD) and Full Duplex (FDX). ESD increases spectrum from 1.2GHz to 1.8GHz but keeps the downstream and upstream traffic flows separate. Whereas FDX sticks with a 1.2GHz-sized pipe but uses noise cancellation to transmit upstream and downstream traffic over the same spectrum.
Broadcom, which is jointly developing a unified DOCSIS 4.0 chipset alongside Charter and Comcast, announced last September the chip would be made available to all operators. Previously, only the largest operators that signed a Joint Development Agreement (JDA) with Broadcom had access.
“But ramping up production takes time,” Heynen explained. “Also, there are still upgrades required to the nodes to be able to support both flavors of DOCSIS 4.0.”
He added it’ll take a while for the system vendors to integrate the chip, test it against the other equipment in the network “and to ensure that each unified node works as advertised” before they ship the chipsets to operators.