DOCSIS 4.0 upgrades seen fueling cable outside plant spending til 2030

Dell’Oro Group's newly launched Cable Outside Plant Equipment Advanced Research Report states that total cable outside plant equipment revenue remains on track to advance 14 percent in 2023, driven largely by continued mid- and high-split DOCSIS 3.1 projects in the North American market, which the analyst says are driving purchases of 1.2 GHz amplifiers. Meanwhile, Dell'Oro notes that beginning later this year, Full Duplex 1.2 GHz and 1.8 GHz amplifiers will begin shipping, with significant volumes expected in 2024.

Jeff Heynen, VP and analyst with the Dell’Oro Group, says: “Short-term band splitting projects will begin to give way to longer-term DOCSIS 4.0 upgrades, particularly in the North American market, where operators are looking to increase capacity and keep pace with fiber ISPs. These upgrades will result in a significant increase in spending on optical nodes, amplifiers, and passive equipment, including taps and hardline splitters."

The analyst projects that global cable outside plant equipment revenues will peak at $1.4 billion in 2027, when the largest number of tier-one operators in North America are expected to be in the middle of their amplifier and node upgrades for DOCSIS 4.0. Dell'Oro expects the DOCSIS 4.0 upgrade cycle to continue through 2030, as operators consistently expand their footprint using 1.8 GHz amplifiers, Full Duplex 1.2 GHz amplifiers, and 2 GHz taps where necessary.

In a recent blog related to the report's release, Heynen explains further:  "As part of the long-term transition to DOCSIS 4.0, cable operators are beginning to update their outside plant–particularly bridger/trunk amplifiers, HFC network taps, and other passive elements in order to upgrade their spectrum capacity from 750 MHz and 1GHz to 1.2 GHz and 1.8 GHz. This upgrade cycle is a once-in-a-decade transition that will help MSOs keep pace with fiber competitors by giving them the capacity to deliver multi-gigabit broadband services to both residential and business customers alike."

In the report, Dell'Oro forecasts North America to remain the largest region for cable outside plant equipment revenue, as operators in other regions either continue with DOCSIS 3.1, or increasingly overbuild with fiber, as reckoned by the analyst.

Heynen in his blog notes that, to take advantage of the opportunities associated with the forthcoming upgrade of cable outside plant elements, component and equipment manufacturers, cable operators, and financial institutions will need to find answers to several critical business questions, including: "How quickly will cable operators begin to swap out their outside plant elements and what will the annual replacement rate be over the course of the next five years?"; and "What percentage of outside plant elements will be used to expand to 1.2 GHz and 1.8 GHz spectrum bands?"

Dell’Oro Group's Cable Outside Plant Equipment Advanced Research Report includes 8-year market forecasts for optical nodes, amplifiers, and passives, including taps, hardline splitters, and power inserters. Amplifiers are also segmented by technology, including 1.2 GHz, 1.2 GHz Full Duplex, and 1.8 GHz. The report also includes regional subscriber forecasts for cable broadband subscribers. Learn more about the report.

More from Dell'Oro Group: