- Broadband providers are likely to spend slightly more on satellite equipment than optical line terminals (ONTs) and optical networking terminals (ONTs)
- What was supposed to be a good year for the broadband access market is now up in the air, thanks to decreased capital investments from providers
- Cable equipment purchases are mostly on hold as operators await improvements in distributed access architecture (DAA)
Rough waters lie ahead for the broadband access equipment market, as increased low-earth orbit (LEO) satellite deployments – along with global economic uncertainty – try to steer the ship astray.
According to Dell’Oro Group VP Jeff Heynen, “there will certainly be a small shift from PON OLT and ONT spend to Starlink and Kuiper dishes and home routers.”
“Just a few weeks ago, I would have said that that shift would be relatively small,” he told Fierce. “But these days, nothing surprises me anymore.”
Not only because changes to the Broadband Equity, Access and Deployment (BEAD) program will likely push for more low-earth orbit (LEO) satellite coverage, but also “there is revenue to be had in providing both broadband service as well as direct-to-cell service in partnership with the mobile carriers,” said Heynen.
So, perhaps we could see more satellite/wireless tag teams like T-Mobile and Starlink’s direct-to-device (D2D) offering. And despite Starlink’s bandwidth constraints, the service now has more than 5 million global subscribers. Amazon’s Project Kuiper meanwhile has yet to launch commercial service, but it’s also expected to be a key player in the LEO satellite market.
It's the economy!
2025 was supposed to be a growth year for the broadband market, said Heynen, as providers have chipped away at their excess inventory and started purchasing more equipment.
It’s a similar song to what’s been happening in the optical transport space. But while the optical market is prepped for a comeback in 2025, the same can’t be said for broadband access equipment.
“The whipsaw approach to tariffs has introduced a level of uncertainty among executives that is pushing them to hold off on making capital investments,” Heynen explained. “Additionally, consumer confidence continues to decline, which means they are unlikely to increase their spend on broadband and other communications services.”
According to Deloitte’s communications infrastructure index, the long-term implication of carriers decreasing their capital investment is “potentially worrisome.” The trend implies that “carriers may lack the return on invested capital incentive to justify further investment to modernize and expand their networks.”
But providers aren’t in entirely dire straits. Heynen noted fiber providers are buying far more ONTs than OLTs to turn up new subscribers.
“Providers should focus on using introductory pricing to expand market share and improve take rates in markets where they are already present,” he said. “We are already seeing this strategy play out in the equipment they are purchasing.”
DOCSIS downswing
On the cable front, the major operators have high hopes for DOCSIS 4.0, which will help them support symmetrical multi-gig services over hybrid fiber coax (HFC).
Nevertheless, spending on DOCSIS infrastructure is on the downswing, mainly because operators are waiting on new Remote-PHY devices that will integrate Broadcom’s “unified” chipsets, said Heynen. Broadcom is developing these chips with Charter and Comcast, aiming to support both mid-split and high-split DOCSIS 4.0 setups.
The most notable manufacturers of Remote-PHY devices tailored to DOCSIS 4.0 include CommScope, Harmonic and Vecima Networks - all of whom have supplier agreements in place with Comcast and Charter.
As operators await for new-and-improved Remote-PHY tech, they’ll continue to purchase more virtual CMTS licenses, Heynen said. For years, Harmonic has been the main player in the vCMTS space, but others like CommScope and Vecima have also gotten in on the action.
Looking ahead to 2026, Heynen predicts cable operators will spend more on amplifiers, nodes and taps to support end-to-end DOCSIS 4.0 initiatives.