Wireline broadband access equipment revenues down in 2013, but decline will slow in 2014

LONDON, ENGLAND: The wireline broadband access equipment market posted 2013 revenues of $5.42 billion, a decline of 23 percent from 2012. DSL equipment revenues declined 28 percent as the decline in ADSL was not offset by VDSL. PON equipment revenues were down by 24 percent, reflecting the lack of a major, new FTTH deployment.

Key highlights:

- For the total broadband access equipment market, Alcatel-Lucent led the gainers followed by Cisco and Adtran. ZTE posted the largest loss in market share. Huawei maintained its dominant position with 28 percent market share.

- While 2013 showed a significant decline in broadband access equipment revenues, the rate of decline will subside in 2014.

- VDSL shipments will remain strong in North American and Western Europe as communications service providers continue to upgrade copper-based networks.

- Vectoring trials will continue throughout 2014 and we expect more announcements regarding commercial availability, similar to the recent announcement by Belgacom.

- ONT/ONU shipments will also remain strong in 2014 as FTTH subscribers are brought onto networks. 1G is gaining mindshare as several service providers see bandwidth as a differentiator.

- OLT port shipments will not grow without a significant, new FTTH PON deployment.

- PON vendors are finding non-FTTH market niches including optical LAN and mobile traffic backhaul. We expect to see expansion in both market niches in 2014. PON for mobile backhaul could boost the next-gen PON market.

- CMTS shipments will remain steady in 2014. The largest unknown is the pending Comcast acquisition of Time Warner, which could help or hurt this market depending on capex plans.

Julie Kunstler, principal analyst, says: "2013 was a tough year for wireline broadband access equipment vendors. We are cautiously optimistic that the large revenue declines will not repeat in 2014. While pricing pressures will continue, we expect strong shipments in vectoring ready VDSL, PON ONTs/ONUs and CMTS."