CAMPBELL, CA —Global spending on DSL and fiber-to-the-home (FTTH) equipment declined 22 percent between the fourth quarter of 2011 and the first quarter of 2012, to $1.8 billion, reports market research firm Infonetics Research in its quarterly report on PON, FTTH and DSL aggregation equipment and subscribers.

“In addition to seeing a first-quarter lull, as we often do in the worldwide broadband aggregation market, there was a big 43 percent drop in Ethernet PON spending in China that drove spending in Asia down a full third this quarter, despite healthy increases in Japan and the rest of Asia Pacific,” explains Jeff Heynen, directing analyst for broadband access and video at Infonetics Research. “The drop in China is due mainly to a shift to FTTH this year and coming off the heels of a record previous quarter. Another, more serious, drag on the overall market was a third consecutive quarter of DSL revenue declines in EMEA, where access network upgrade projects have stalled because of the unstable economic environment.”

MARKET HIGHLIGHTS

  • EPON spending in Japan increased 11 percent in 1Q12 from 4Q11, as NTT and KDDI are in
    the midst of upgrading their FTTB+VDSL deployments to FTTH and are beginning to replace fully depreciated EPON gear from 2004 and 2005.

  • With Verizon’s FiOS and AT&T’s U-verse rollouts slowing, combined with seasonal softness, the North American combined DSL and FTTH equipment markets saw 21 percent declines in 1Q12.

  • Although the Latin American market remains fiercely competitive, operators spent 1Q12
    absorbing the new capacity they purchased in 4Q11, when record spending was recorded in the region.
  • Despite a 40 percent sequential decline in broadband aggregation equipment revenue in 1Q12 from the previous quarter, Huawei maintains its worldwide revenue lead (though with significantly less share), followed by ZTE and Alcatel-Lucent.
  • Only a handful of broadband aggregation equipment vendors managed to increase their revenue in 1Q12, including many of the top players in Japan: Fujitsu, O.F. Networks and NEC.
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