Broadband CPE market to perform better than expected


Michelle Clancy

| 24 September 2015

Research firm IHS has raised its outlook for the broadband customer premises equipment (CPE) market.

The market, which includes DSL, cable, fibre-to-the-home (FTTH), residential gateways and mobile broadband CPE, should reach $12.4 billion in 2019 an increase of 8% on the previous forecast from the firm.

"The primary source for raising our global broadband CPE forecast is the massive investment currently ongoing in China," said Jeff Heynen, research director for broadband access and pay-TV at IHS. "Despite reported economic headwinds, the Chinese Government continues to subsidise telco investments in fibre infrastructure to expand accessibility and throughput. The result is heavy spending on GPON and EPON ONT."

At the same time, the shift from fibre-to-the-building (FTTB) to FTTH architecture is well underway in China.

"A primary reason for this architectural shift is that FTTB plus ADSL take-rates at China Telecom have been disappointing; consumers aren't interested in a connection that offers only a marginal improvement over what they already have," Heynen added. "If they are to subscribe to a home broadband service, it needs to provide a minimum of 8MB to 10MB speeds."

According to the firm's findings, the big story this quarter is FTTH optical network terminals (ONTs) in China, where unit shipments more than doubled year-over-year, from 9.8 million to over 20 million from Q2 2014 to Q2 2015.

In 2Q15, the global broadband CPE market grew 5% from the previous quarter, to $2.9 billion; unit shipments grew 11%, to 61 million. Worldwide total broadband CPE revenue is up 7% from the year-ago second quarter, when it was just under $2.7 billion.