Dell’Oro says DOCSIS 4.0 upgrades could take longer than expected

Dell’Oro Group tipped spending on cable outside plant equipment to surpass $1 billion in 2023, but noted in a new report that revenue in the segment isn’t expected to peak until 2027. That’s interesting given operators like Charter Communications and Comcast are expected to kick off DOCSIS 4.0 deployments in earnest next year.

The forecast $1 billion in spending will represent a 14% increase in revenue year on year. Around 75% of that will come from North America, Heynen said. The peak figure expected in 2027 is $1.4 billion.

Jeff Heynen, Dell’Oro Group VP, told Fierce that while it may not be the high-water mark for Charter or Comcast “when you throw Cox and Cable One and Rogers, Shaw into the mix, that seemed to be the year that things peaked.” He added that 2026 will also be a big year for outside plant spending, with 2027 only just edging it out.

According to Heynen, cable outside plant equipment includes things like optical nodes, amplifiers and passive devices like caps, hardline splitters and power inserters. As far as amplifiers go today, the bulk of spending is on 1.2 GHz kit for DOCSIS 3.1 mid- and high-splits since 1.8 GHz and full duplex amps are still largely still unavailable. These are expected to begin shipping in significant volumes in 2024 and by 2026 and 2027, all the components that will be going into the field will be by and large for DOCSIS 4.0. And it won’t stop there.

“I extended the forecast to 2030 because I got the impression that things were going to take longer than operators are actually leading on,” he said. “A lot of that has to do with labor issues and supply chain issues that still exist. So, there’s this desire to get these speeds and capacity out there as quickly as possible, but I think operators also have to understand they’re going to [need to] be flexible.”

By flexible, Heynen means able to shift focus between things like node and amp upgrades to accommodate changing market conditions.

Looking beyond North America, Heynen said several operators in Latin America will likely follow similar DOCSIS 4.0 upgrade paths as their U.S. counterparts but not until the 2027 to 2030 timeframe. That’s because operators in this region are typically four to five years behind North America, a delay which allows them to take advantage of pricing declines and greater component availability, he said.