DAA Upgrades Could Bring Boon to Cable Vendors

Cable capex is generally going down as the initial wave of DOCSIS 3.1 deployments wrap up and MSOs reduce spending on set-tops, with 2019 likely to shape up as a year that some vendors will want to forget. But the outlook is not all grim and bleak, with some upside in the years ahead as cable operators start to embark on distributed access architecture (DAA) upgrades in earnest, according to a new forecast from Dell'Oro Group. (See Cable & Wireless: A Tale of Two Capex Scenarios in 2019.)

Though many cable operators are still deciding how and precisely when they will move ahead with DAA, causing some MSO spending delays this year, relief will come in 2020 and beyond as DAA upgrades kick in.

Aided by those DAA-related investments, which include purchases of new remote PHY and remote MACPHY nodes, sales of cable broadband access equipment will climb to $2 billion in 2023, up from $1.5 billion in 2019, according to Dell'Oro's new five-year broadband access forecast.

By pushing more electronics and functions toward the edge of the network and deepening the digitization of the network, DAA is poised to spread out and reduce cable space and power requirements, pack more capacity on the network and drive toward symmetrical multi-gigabit speeds on HFC.

Jeff Heynen, research director at the Dell'Oro Group, acknowledged that the rise in these revenues aren't a massive jump, but do represent incremental growth for vendors that will become more pronounced in 2020.

Dell'Oro's $2 billion projection is significant in that the total CCAP (converged cable access platform) market has never exceeded $1.5 billion. The increase in revenues enters play as MSOs touch more parts of the access network with DOCSIS equipment as the network becomes less centralized. Cable nodes have typically been counted separately, but with DAA, they add DOCSIS and other capabilities and become part of that broader CCAP revenue equation, said Heynen, who will present more data and findings next month at Light Reading's Cable Next-Gen Technologies & Strategies event in Denver.

And for much more about Heynen's forecast and his thoughts on when DAA-related equipment spending will pick up and how this opportunity might affect suppliers such as Arris, Cisco Systems, Casa Systems, Harmonic and Nokia, please see this story on our sister site, Light Reading. (See How Cable Vendors Could Profit From DAA Upgrades.)

— Jeff Baumgartner, Senior Editor, Light Reading