China set a record for PON equipment revenue in the second quarter, topping US$1 billion for the first time, revealed new figures from IHS this week.
"We are seeing record shipments of EPON and GPON equipment in China to support continued massive government initiatives to expand the FTTH (fibre-to-the-home) footprint and service availability throughout the country," noted Jeff Heynen, research director for broadband access and pay TV at IHS, in a research note.
According to IHS, revenue from fixed broadband equipment – DSL, PON, and Ethernet FTTH – reached $2.32 billion globally in the three months to 30 June, up from $2.08 billion in Q1, and $2.09 billion in the second quarter of 2014.
"Service providers realize that fixed broadband services provide some of the highest margins among all their services, so investment levels to expand the speed and capabilities of fixed broadband should remain steady with a continued focus on pushing fibre deeper into access networks and closer to customers," Heynen said.
The strong showing from China and aggressive moves by AT&T to expand its fibre coverage prompted IHS to raise its annual fixed broadband revenue forecast to $9 billion worldwide by 2019, up 1 8% from its earlier forecast of $7.6 billion.
"We have long since given up on trying to predict a slowdown in FTTH spending levels among the China’s three major operators; but with GPON ONT (optical network terminal) volumes this quarter exceeding 15 million units and with guidance from vendors and component suppliers indicating no let-down, we had to increase our long-term forecasts," Heynen explained.
"Additionally, AT&T’s commitment to GPON and follow-on spending from competitors, including cable MSOs (multi-system operators), resulted in our 18% forecast increase," he said.
