- The fiber broadband industry will probably see a minimal tariff impact, said Dell’Oro’s Jeff Heynen
- Production was already onshored and is poised to further ramp up in 2025
- Cable, however, will likely suffer a bigger tariff blow
Tariff confusion is through the roof right now, but fiber broadband operators and their equipment suppliers probably don’t have much to worry about, according to Dell’Oro Group VP Jeff Heynen.
The most common fiber components such as PON optical line terminals (OLTs), optical networking terminals (ONTs), cabinets and fiber optic cables “have already been self-certified by the respective vendors and have already seen substantial increases in domestic manufacturing,” Heynen noted in a blog.
Many fiber vendors, like Nokia, STL, Vecima Networks and others, onshored most of their manufacturing to the U.S. to adhere to the Build America, Buy America (BABA) requirement of the Broadband Equity, Access and Deployment (BEAD) program. BEAD may be going through uncertainties of its own, but that doesn’t change the fact these vendors have already set up shop stateside – a move that is massively beneficial in the current environment.
Buy America isn’t fiber’s only saving grace from tariffs, as some operators planned ahead on their purchases. For instance, AT&T and Lumen last year both inked multi-year deals with Corning to ensure they have enough gear for their respective fiber ambitions.
“Originally intended to safeguard against supply shortages, [AT&T's] move now also serves to mitigate the risk of rising component costs,” said Heynen.
Amid mounting economic uncertainty, equipment vendors are also seeing what else is out there aside from rural broadband opportunities. Adtran has said BEAD specifically is “becoming less and less a part of people’s near-term plans,” as the company chases fiber revenue outside the U.S.
Cable vendors will feel the tariff burn
While the fiber broadband market will likely see minimal impact from tariffs, the same can’t be said for vendors in the cable and DOCSIS space.
CommScope and Teleste, which produce amplifiers and other cable components in Mexico and Finland, respectively, “will both be impacted by tariffs at any level,” Heynen said. But it’s possible the U.S. government may offer them some reprieve, whether it’s through a waiver or other means.
“Both vendors have already brought some manufacturing to the U.S., particularly to qualify for BEAD projects,” he told Fierce. “I think it’s safe to assume that both will use that as evidence that they are committed to the U.S. market” to convince the administration that their products made outside the country “should be exempt from the tariffs or at least [see] reduced tariffs.”
Similar to what fiber providers are doing, cable operators are aiming to stay on top of their inventory. Heynen thinks Charter and Comcast are trying to buy “as many amplifiers and passives as they can” to keep up with outside plant upgrades.
“Certainly, the vendors aren’t going to stop production on that equipment,” he said.
But it comes as no surprise that DOCSIS 4.0 deployments will likely be further delayed, as operators may “delay their purchasing a bit” as they mull over how tariffs will actually impact the pricing of cable components.
CHR Solutions CEO Arun Pasrija recently told Fierce 2025 could see a further shift towards U.S.-based manufacturing but it won’t be without some pain.
“While increased domestic production could eventually help alleviate cost pressures, it will likely take more than 12 months for supply chain adjustments—assuming tariffs remain in place—before the industry starts seeing real relief from net cost impacts,” Pasrija said.
Will tariffs cause another inventory hang-up?
Broadband vendors are only now getting over their post-Covid inventory troubles, where stockpiles of unused gear resulted in revenue slumps across the board.
The good news is we probably won’t see a repeat of the inventory issue, according to Heynen. The bad news is operators will likely curb spending not only due to tariffs but because they are waiting on upgrades for certain gear.
Cable players, for instance, need Radio Frequency (RF) trays that can support “unified” DOCSIS 4.0, a technology that would allow them to use both the extended spectrum (ESD) and full-duplex (FDX) methods for deployment.
“I think the chances of service providers slowing their purchasing in the face of tariff uncertainty is higher than them increasing their orders and running the risk of having equipment sit in warehouses and losing value,” Heynen concluded.