China spends more than $1 billion on PON gear in 2Q15: IHS

Chinese operators spent more than $1 billion on PON systems for the first time ever in the second quarter of 2015, according to IHS (NYSE: IHS). The spending spree helped boost overall global broadband aggregation equipment (DSL, PON, and Ethernet FTTH) revenues 12% sequentially and 11% year-over-year, the market research firm states in its recently released "IHS Infonetics PON, FTTH, and DSL Aggregation Equipment" market research report.

Operators in China spread their PON expenditures across technologies, IHS reveals. "We are seeing record shipments of EPON and GPON equipment in China to support continued massive government initiatives to expand the FTTH footprint and service availability throughout the country," reported Jeff Heynen, research director for broadband access and pay TV at IHS.

Not surprisingly, PON's strength in China helped translate into revenue growth for the technology both sequentially and versus the year-ago quarter. With two strong quarters behind it, PON revenues should end the year up versus 2014, IHS now predicts.

In fact, overall spending on broadband access network equipment should improve for the foreseeable future. IHS believes broadband aggregation equipment revenues will reach $9 billion in 2019.

"Service providers realize that fixed broadband services provide some of the highest margins among all their services, so investment levels to expand the speed and capabilities of fixed broadband should remain steady with a continued focus on pushing fiber deeper into access networks and closer to customers," Heynen explained.

The quarterly "IHS Infonetics PON, FTTH, and DSL Aggregation Equipment" market research report tracks BPON, EPON, GPON, FTTH, FTTB, PON, and DSL aggregation equipment and subscribers. It offers market size, vendor market share, forecasts through 2019, analysis and trends.

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