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Forecast Broadband Equipment Sales Decline

In a newly published report, Dell'Oro Group forecasts that combined revenue for Cable, DSL and PON (fiber) access concentrators and customer premises equipment (CPE) peaked at $9.4 billion in 2006 and will gradually decline over the next five years, in part due to slowing worldwide broadband subscriber net additions.

Despite this anticipated market decline, revenues from VDSL are expected to more than double and PON are estimated to increase by almost 50 percent over the same period.

"Even though subscriber additions are slowing, there are still major opportunities for infrastructure equipment manufacturers to grow revenue as service providers look to new services," said Tam Dell'Oro, Founder of the market researcher Dell'Oro Group.

"VDSL and PON are the two leading technologies being considered by service providers to deliver higher bandwidth required for new video services. Increasingly, manufacturers that have total end-to-end VDSL and PON solutions with professional services, will be the ones that benefit," added Dell'Oro.

I'm wondering if perhaps the majority of equipment sales will transition to system upgrades, particularly in the North America market where broadband internet access speeds are typically lower than is currently available in both the leading European and Asia-Pacific markets. We shall have to wait and see if this prediction of a revenue decline comes to pass.

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