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Arris posts solid Q2 CPE sales, Cisco still leads CMTS pack

Fri, 10/05/2012 - 1:50pm
Mike Robuck

Bolstered by DOCSIS 3.0 upgrades in North America, Arris posted strong revenue growth for customer premise equipment in the second quarter of this year while Cisco is still the leader of the pack for cable modem termination revenue.

Customer premise equipment (CPE) sales are typically strong in the second quarter, and this year’s revenue results followed that trend, according to a report by Infonetics Research. The study tracked market share and revenues across DSL, cable, and fiber-to-the-home (FTTH) for CPE.

“Revenue was up across the board, with the cable segment fairing particularly well. Wideband (DOCSIS 3.0) revenue rose 22 percent on the heels of a 15 percent increase in the first quarter of 2012,” said Jeff Heynen, directing analyst for broadband access and pay TV at Infonetics Research. “North American MSOs, and Comcast in particular, are in the process of upgrading their existing subscribers to DOCSIS 3.0, even if they’re not subscribed to a wideband tier. The flexibility of channel bonding, the transition to IPv6, and the ability to upgrade subscribers without having to do expensive truck rolls are all reasons behind the wholesale swap.”

“Arris is the primary beneficiary of these upgrades, increasing revenue by more than a third quarter-over-quarter on the back of strong wideband EMTA sales.”

Comcast is close to completing its DOCSIS 3.0 upgrades while other North American cable operators are in the process of filling in the remaining gaps of their respective footprints with the faster wideband services.

Overall,  global broadband CPE rose across all of the technology segments in the second quarter of this year with cable CPE up 8 percent, DSL  up 6 percent, and FTTH 1 percent.

ZTE edged Huawei to take the No. 1 spot for broadband CPE revenue market share in the second quarter, buoyed by strong sales of high-end VDSL gateways to European customers, including Deutsche Telekom.

Arris, Technicolor, and Pace finished in a virtual dead heat for third place in the race for broadband CPE revenue market share. Infonetics also forecast there would be 112 million FTTH broadband subscribers by 2016, a 23 percent compound annual growth rate (CAGR) from 2011 to 2016

Cisco extends worldwide CMTS revenue lead

On the cable modem termination system (CMTS) front, Cisco extended its worldwide CMTS revenue market share by four points in the second quarter, while second-ranked Arris  gained one market share point and third-ranked Motorola lost six points.

Globally, CMTS and edge QAM revenue fell 9 percent in the second quarter of this year to $409 million. Asia Pacific bucked the global trend, eking out a small sequential increase in CTMS and edge QAM revenue in the same time frame.

“After two straight quarters of increases, CMTS and edge QAM  revenue fell in the second quarter as operators paused spending to deploy new capacity gained earlier in the year,” Heynen said. “Still, CMTS channel shipments are up 2 percent year-over-year despite the looming availability of converged cable access platforms (CCAP), and on the heels of 2011, cable broad band’s largest on record. Clearly there is momentum behind DOCSIS 3.0 deployments and the MSOs continue to be big on broadband.”

An increase in broadband subscribers has been a tonic to cable operators over the past few years by offsetting some of the basic  video subscriber losses.

CCAP products will be more widely on display at this month’s SCTE Cable-Tec Expo in Orlando ahead of possible deployments later this year and early next year.

From this year to 2016, Infonetics forecasts that operators will spend a cumulative $11.2 billion worldwide on CMTS and QAM equipment, to support growth in DOCSIS bandwidth, CCAP deployments, and IP video.

Infonetics expects the number of cable broadband subscribers to approach 111 million worldwide in 2012, with standard broadband subscribers declining slowly and wideband broadband subscribers ramping up.

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