Infonetics: 1Q11 PON sales jump while DSL plunges

Led by a double-digit drop in DSL sales, the DSL, PON, and Ethernet FTTH equipment market declined 2% in the first quarter of 2011 (1Q11), says market research firm Infonetics Research. According to excerpts from the 1Q11 PON, FTTH, and DSL Aggregation Equipment and Subscribers preliminary vendor market share report, the aggregate revenue of these three broadband product areas totaled $1.96 billion worldwide.

This was the second straight sequential decline for DSL aggregation equipment; the segment dropped 1.6% quarter on quarter in 4Q10 (see “Infonetics: Broadband aggregation spending grows 27% in 2010”). The news wasn’t all bad for the DSL space, however, as the 1Q11 figures represent an upswing of 36% year on year, according to the report.

“The major story in the broadband aggregation equipment market this quarter is the dramatic drop in DSL ports in China, which points to operators there continuing their dramatic shift away from DSL,” notes Jeff Heynen, directing analyst for broadband access at Infonetics Research. “The first quarter is typically one of the slowest for DSL, but the seasonal effect was worsened by Chinese operators’ continued shift away from traditional DSLAM deployments. Also, voice ports (DS0s) on FTTB/MXU MSAPs in Asia dropped significantly, signaling a shift away from adding voice lines to simply installing DSL ports.”

Meanwhile, things look particularly rosy for FTTH. The worldwide PON market increased 20% in 1Q11 over 4Q10, surpassing the $1.0 billion threshold for the first time ever, the report notes. PON sales grew 6.5% sequentially in 4Q10, which reflects the general trend toward fiber in general and PON in particular. For example, driven by the Chinese operators and sustained growth in Japan and Korea, worldwide EPON spending was up 46% in 1Q11 over 4Q10.

In addition, Infonetics says the North American GPON market should regain its momentum over the next few quarters, as Verizon re-initiates its FiOS buildout and broadband stimulus deployments continue.

Equipment supplier winners included Calix, whose Ethernet FTTH equipment revenue jumped 222% in the quarter, thanks to broadband stimulus grants, as well as Huawei and ZTE. The Chinese systems suppliers benefited the most from a surge in spending by Chinese operators’ on EPON and GPON equipment this quarter, despite being equally hammered by the decline in spending for DSL equipment.

Infonetics’ quarterly PON, FTTH, and DSL Aggregation report provides worldwide and regional market size, market share, analysis, and forecasts through 2015 (full report and forecasts published May 31).

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