Dell’Oro’s latest market estimates suggest year-on-year spend on broadband access equipment dropped $2.5 billion, some 15%, thanks to the coronavirus pandemic.
Although this period is traditionally a sluggish one for the segment, the emergence of COVID-19 did nothing to help matters, as supply chains were thrown into chaos.
“The first half of 2020 will give way to a sustained rebound in broadband equipment spending in the second half of the year,” said Jeff Heynen of the Dell’Oro Group.
“The need to expand residential broadband speeds and availability will ultimately win out over the current macroeconomic slowdown.”
This is perhaps the greatest point of optimism for the segment, as while it might be a little poorer for the moment, this is only a temporary glitch in the matrix. There is still demand for faster broadband services, the cash rewards are simply delayed a bit.
Across the European market, 39 nations inside and outside of the EU, there are now 70.4 million fibre broadband subscribers. This is according to data from the Fibre to the Home Council Europe. There has been a steady increase through the years, subscriptions have doubled since 2015, the issue seems to be actually selling the services to customers.
The same data suggests there are now 172.2 million homes passed with fibre broadband across the 39 countries. This means that only 40.8% of the homes who have access to the fastest available broadband speeds are actually purchasing them.
Consumer appetite in the home broadband market is now only one driver for fibre deployments, 5G backhaul is a very attractive business case, but if the industry is not able to figure out how to sell fibre broadband to consumers, it will certainly start to impact the momentum of full-fibre network expansion.
The current spending slowdown on broadband network infrastructure is only temporary, but the bigger question of how to sell to the consumer will have to be addressed at some point.