Broadbandtrends recently published its 4Q15 & 2015 Global DSL Market Share (BBT_2015DSLMktShare_161010_TOC) – which provides insight into the current state of the DSL market.
Unlike the quarterly reports, which look at a smaller snapshot of the current market, the annual review allows us to take a broader look at the trends in DSL market. We’ve been collecting shipment data since the beginning (1999), watching the transitions occur between technology types as well as the transformations within each region.
In 2015, DSL shipments hit a milestone: over 1 Billion DSL ports shipped . This is a cumulative number and a large portion of this is associated with upgrade/replacement cycles. But shipped ports do not equal subscribers. At the end of 2015, we estimated global DSL subscribers at 351 million – roughly 1/3 of total port shipments.
As shown, 1.042 billion DSL ports have been shipped globally since 1999. Market share is identified for those vendors that remain active in the DSL market and have at least one percent market share. Nokia (formerly Alcatel-Lucent) and Huawei have shipped the majority of DSL ports – nearly 60% – followed by ZTE, ADTRAN and ZyXEL.
Going forward, those vendors shipping into EMEA, which has embraced copper as a viable ultra-broadband option, will continue to experience strong shipments for a least a few more years.
There is no argument that fiber is the future and as China started to shift its focus away from DSL towards fiber as part of its Broadband China Strategy (beginning in 2012) – its impact on DSL shipments was notable.
However, if we remove China’s contribution to the overall market – demand for DSL has actually increased the past three years as operators shift their investment towards VDSL. In fact, during 2015, 64% of all DSL ports shipped were VDSL.
Even in the U.S. – where FTTH deployments continue to accelerate – demand for DSL remains robust – largely due to Connect America Fund (CAF) Round II – which provides funding to operators to help close the digital divide among more rural subscribers. In fact, operators are leveraging VDSL technology to serve these rural markets as evidenced by the fact that nearly 93% of DSL ports shipped into North America during 2015 were VDSL.
The Copper Conundrum
Many will argue that operators are wasting money by continuing to invest in their copper plant – and perhaps that is true in some scenarios. For example, Portugal Telecom recently stated that it was going to rip out its legacy copper access network within the next few years and concentrate solely on fiber by 2020 – no more copper investment.
But this is a rare case – where the cost per household of rolling out FTTH is less than €100, which is significantly less than the average of €600-€700. So in this case it makes sense, but for the large majority, the business case continues to support investment in the copper infrastructure.
The good news with advanced copper technologies, such as VDSL2 Vectoring and G.fast, is that they both require fiber to be pushed further into the access network. More importantly, these fiber investments can be leveraged in the future to support FTTH deployments.
And operators are starting to embrace these advanced technologies, evidenced by the fact that demand for VDSL2 vectoring continues to grow, with approximately 36 million ports shipped to date.
The decision to continue with copper will be based on numerous factors – competitive environment, cost, time to market, regulatory, etc. And based on continuing strong shipments, copper broadband technologies remain one of the many tools available to operators to offer enhanced broadband services to its customers. But it is not the only one.