Dell’Oro Group projects a boom in broadband spending across passive optical network (PON) equipment, fixed wireless CPE, and cable distributed access equipment, pushing the market to $23.4 billion by 2026.

“It is very clear that the pandemic has boosted the importance of fixed broadband services, not only to consumers but also to ISPs around the world,” Dell'Oro Group VP and Analyst Jeff Heynen told SDxCentral.

PON revenue is set to soar from $9.3 billion in 2021, to $13.6 billion by 2026, with 10-gigabit symmetric passive optical network technology (XGS-PON) deployments in North America; Europe, the Middle East and Africa (EMEA); and Caribbean and Latin America (CALA) as a driving catalyst. 

Fixed-wireless CPE revenues are also expected to reach $5.1 billion over that time frame largely led by 5G sub-6 GHz and 5G millimeter wave (mmWave) fixed-wireless access (FWA) unit shipments. 

Operators ramping DOCSIS 4.0 and fiber deployments willl drive cable distributed access equipment revenue to nearly $1.3 billion by 2026. This includes virtual converged cable access platforms (CCAP), remote PHY devices, remote MACPHY devices, and remote PON optical line terminals (OLTs).

Heynen highlighted robust spending on PON and fiber-to-the-home (FTTH).

“For over a decade now, broadband spending has been pretty predictable and relatively flat at a macro level,” he said. But now, “it’s as if the entire industry woke up and said, yes, now is the time to retrofit my broadband networks for the next 10 to 15 years.”

He was also surprised at strong fixed-wireless CPE purchases.

“Obviously, T-mobile is leading this charge and is having tremendous success attracting new subscribers to its 5G FWA service, which is coming at the expense of the major cable operators in the U.S.,” Heynen explained. “I think this churn from cable to FWA is going to be one of the major storylines of the year. Our projections for FWA CPE purchases and what we have already seen purchased so far this year corroborates the effort wireless providers are putting into growing their FWA subscriber base.”

Heynen attributes the spending to market demand for increased connectivity speeds and reach into new regions, saying the competitive landscape has drastically changed since the uptick of broadband access network investments. 

“In many countries and areas there was typically just one realistic option for fixed-broadband service. Gradually, that situation is going to change and consumers will have multiple options,” he continued.

This means providers will need competitive pricing and a paradigmatic package of high speeds, low latency, and more “to stand out from the crowd – something many providers are not used to doing.”