Broadband Equipment Market Flat as PON Grows and DSL Slows

CAMPBELL, CA — PON (passive optical network) grew 1 percent in the third quarter 2014 while DSL aggregation equipment revenues were down 6 percent quarter-over-quarter, according to findings by market research firm Infonetics Research in its 3Q14 "PON, FTTH, and DSL Aggregation Equipment and Subscribers" report.

"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," says 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 adds: "DSL aggregation equipment revenue was down 6 percent quarter-over-quarter in 3Q14. The third quarter is an inconsistent one, with some regions ramping spending while others brake expenditures ahead of fourth quarter budget flushes. And last quarter's 19 percent sequential jump in revenue probably sealed Q3's fate. The good news is that fourth quarter spending should increase solidly."

Broadband Market Highlights

• The global broadband aggregation equipment market (DSL, PON, and Ethernet FTTH) is down 1 percent in 3Q14 from 2Q14, to $2 billion


• Q3 was a mixed bag for regional investment: Spending on broadband aggregation gear increased in Asia Pacific and North America, but declined in EMEA (Europe, Middle East, Africa) and CALA (Caribbean and Latin America)


• The broadband aggregation equipment market share leaders in 3Q14 are, in alphabetical order, Alcatel-Lucent, Huawei, and ZTE


• 4Q14 is anticipated to be a dynamic one for the North American region, with Connect America Fund (CAF) projects getting underway on one hand, while on the other AT&T and other service providers threaten to halt broadband rollouts until there is more clarity on pending net neutrality legislation