Jeff Heynen, vice president of Broadband Access and Home Networking at Dell’Oro Group, reported during a recent Fiber for Breakfast that fiber is eating away at cable’s market share.
Dell’Oro forecasts that, by the end of the decade, fiber will hold a 33% market share in North America, with cable’s share shrinking from its current 62% to 53%.
“Some folks that forecast subscriber numbers have shown that cable’s share remains a little bit higher than that,” said Heynen, “but we’re forecasting that there’s going to be a higher percentage fiber overbuilding, even by MSOs. So that will feed into additional fiber deployments by cable operators in markets certainly where they have competition—or even in markets where a DOCSIS 4.0 upgrade, because of the number of amps, or the age of the amplifiers, or condition of the coaxial cable, doesn’t make economic sense, and so they end up overbuilding with fiber.”
Impressive fiber take rates
Heynen reported that, although overall fiber passings have slowed from their 2022 peak, fiber is still seeing steady annual growth and new unique home passings—a trend Dell’Oro expects to continue through the end of the decade.
According to Heynen, in addition to continued funding, fiber growth is being driven by private sector take rates in markets previously dominated by cable. Some markets, he said, are seeing fiber take rates of 45% or more, and for large operators, fiber overbuilds correlate with broadband ARPU increases.
“On average, we typically assume around a 30% take rate makes a deployment successful,” said Heynen, “but where fiber is deployed, it typically achieves that 45% threshold fairly quickly.”
Heynen also reported that fiber presents operators with opportunities for cost savings and other advantages that are becoming more important as data use grows.
“In every discussion I have with an operator,” said Heynen, “whether it’s cable, whether it’s a fiber ISP, even fixed wireless, we’re seeing downstream consumption growth slowing; however, upstream growth continues to remain high, so obviously that gives fiber an advantage certainly with symmetric speeds.”
Heynen reported that cable operators are now finding themselves in a challenging position.
“They’re trying to balance the fact that they’re having a tough time adding new subscribers, but also, at the same time, they’re making headway on the MVNO side with wireless subscribers,” said Heynen. “So for cable operators, convergence is really becoming the name of the game, and they’re hopeful as they’re continuing to build out these distributed access networks, upgrading to DOCSIS 3.1 extended and DOCSIS 4.0 to improve both the upstream speeds and downstream speeds, that in the meantime they’re also signing up these broadband subscribers to mobile services.”
2025 inventory expectations
Heynen reported that inventory levels among operators are now stabilizing, and the industry is returning to normal purchasing patterns.
“2024 was a very challenging year from an equipment purchasing perspective,” said Heynen, “and that really has to do with the fact that 2022 and 2023 saw a tremendous amount of purchasing, and maybe over purchasing, on the part of many operators, and so really, 2024 was kind of this final year of working through that excess inventory.”
Dell’Oro updated some figures from its July 2024 forecast to its January 2025 forecast, including lowering the expected revenue for PON equipment. The July report predicted 2025 PON equipment revenues to grow 8.5%; this was lowered to 1.4% growth in the updated report. Heynen said that uncertainty regarding macroeconomic conditions, high interest rates, potential tariff impacts, and other factors have all introduced delays in equipment purchases that will extend at least through the first half of the year.
“Even if the second half of the year shows strong growth, we still think that that’s not going to be able to overcome some of the weakness that we’re going to see here in the first half of the year,” said Heynen.
The forecasted revenue growth for DOCSIS equipment was also slightly lowered, going from 3.5% in the July report to 1.6% in the January report. Forecasted fixed wireless growth remained steady, with Dell’Oro predicting 7.7% growth in the July report and 7.8% growth in the January report.
“It seems, at least in the North American market—and we’re also seeing this in Europe as well—that operators are taking a step back, taking a look at what’s going on, and trying to feel out, ‘what are my consumers, what are my potential subscribers looking for?’” said Heynen, “and so the one thing that we know has happened is that fixed wireless has occupied a niche here in the North American market of best available, lowest cost broadband and we expect that for the short term, fixed wireless will continue to occupy that niche.”
Heynen reported that fixed wireless growth will mostly impact cable operators at the low end, and Dell’Oro forecasts fixed wireless subscriber numbers to peak at around 13% and then moderate over time. This subscriber growth is expected to continue through 2026 before slowing.
Heynen reported that major fixed wireless operators are seeing slowing residential subscriber rates, but not necessarily slowing business subscriber rates.
“Business growth has been interesting,” said Heynen. “Certainly, both Verizon and T-Mobile have gone to market with a very attractive offering: if you’ve got multiple offices and you’re used to, as an IT person for a company with multiple locations, dealing with the broadband provider in those markets, why not deal with a single provider by using fixed wireless?”
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Hayden Beeson
Hayden Beeson is a writer and editor with over seven years of experience in a variety of industries. Prior to joining Lightwave and Broadband Technology Report, he was the associate editor of Architectural SSL and LEDs Magazine.