Last year’s slowdown in broadband equipment sales, which was projected at a 10 percent decrease, will continue into 2024, according to the Dell’Oro Group. The decline is weighed by higher interest rates.
“Early projections for 2024 indicate an additional 5 percent year-over-year decrease, as the lagging impact of interest rate increases to curb inflation will be felt more acutely. This additional 5 percent decrease would put total spending to around $16.5 billion, roughly equal to 2021 spending levels,” the firm said.
The deployment of the government’s BEAD money will be the light at the end of the tunnel, Dell’Oro projected, as the rural broadband subsidies are expected to be spent in 2025 and beyond.
“The silver lining here is that very early signals regarding 2025 show a return to growth, as BEAD and other subsidization efforts begin to trickle down to broadband equipment suppliers,” Dell’Oro said. Well before that, pockets of growth will occur in fixed wireless customer premise equipment, cable equipment and wireline CPE, and continued spending on passive optical network equipment by Tier 2 and Tier 3 operators, the firm added.
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