What’s up with… Broadband kit sales, Allot and Dish, China Mobile

• The broadband network equipment sector is shrinking, notes Dell’Oro
• Allot is in dispute with 5G operator Dish Network
• China Mobile needs a new CEO

In today’s industry news roundup: After years of growth, the global fixed broadband equipment market is on the wane, according to research house Dell’Oro Group; Dish is withholding payments to its analytics and security software supplier Allot; China Mobile’s CEO has quit; and much more! 

The challenges plaguing the broadband network equipment market will continue well into 2024, continuing the trend of decreased spending that shaped 2023, according to Jeff Heynen, who in his role as VP of Dell’Oro Group is responsible for broadband access and home networking. The root cause lies in inventory correction (also referred to as inventory realignment), which is expected to contribute to a 10% decline in spending on broadband equipment in 2023. Heynen noted that early projections for 2024 indicate an additional 5% year-on-year drop, as “the lagging impact of interest rate increases to curb inflation will be felt more acutely.” The decline in 2024 would put total spending at around $16.5bn, which roughly equates to 2021 spending levels. Dell’Oro predicted several big trends for 2024, including new ways for cable operators to fend off competition from fixed wireless access (FWA) and fibre, such as Comcast’s new service tiers offering speeds of 2Gbit/s. Additional fibre-to-the-home (FTTH) deployments – both greenfield and overbuild – are also expected around the world this year. Heynen highlighted XGS-PON as the biggest technology beneficiary that will dominate fibre spend in 2024. The technology has already surpassed 2022 revenue levels for 2.5Gbit/s GPON (gigabit passive optical network), and is expected to more than double in 2024. In the passive optical network (PON) market, Tier 1 operators are expected to lower their goals for the number of homes passed in 2024, though a renewed construction phase is expected to begin in 2025, which will propel the overall PON market through to the end of the decade. No slowdown is predicted for Tier 2 and Tier 3 operators in North America and Europe in 2024, as they are set to upgrade and expand their fibre networks in the period. Finally, Dell’Oro believes that the progress of Wi-Fi 7 will accelerate, with the analyst house’s latest forecast from July 2023 suggesting that more than 2.5 million residential Wi-Fi routers and broadband gateways will ship in 2024. However, Heynen noted that the company will increase its forecast based on the opening of certification testing for Wi-Fi 7 products. After an overall decline in broadband spending in 2024, the research house predicts there will be a return to growth in 2025, as the Broadband Equity, Access and Deployment (BEAD) programme in the US, and other subsidisation efforts, “begin to trickle down to broadband equipment suppliers”. Find out more.

Analytics and security system vendor Allot has fallen out with one of its high-profile telco customers, US 5G newcomer Dish Network. The Open RAN-based mobile network operator, which selected Allot for its network intelligence and security-as-a-service (SECaaS) solutions in 2021, is withholding payments from its supplier. According to Allot, it “received a notice from Dish alleging that the software provided to it by Allot failed to meet certain specifications as required in the contract. Dish is demanding that Allot rectify this default and provide compliant software and related support services. Allot believes that Dish, which is currently delinquent in making certain due payments to Allot, raises allegations that are without merit and that there is no basis for Dish’s demands, as Allot believes it provided compliant software and related support services to Dish in a timely manner. Importantly, the software and related support services were duly accepted by Dish in writing as required under the contract. Allot will vigorously pursue its rights to obtain full payment of all amounts due in accordance with the contract.” The vendor noted that as a result of the dispute with Dish, it will report “an increase of approximately $9m in allowance for credit losses” for its 2023 financials. Read more. 

China Mobile, the largest telco in the world by subscriber numbers with almost 991 million mobile connections and 298 million fixed broadband connections, is looking for a new CEO following the resignation of Dong Xin with immediate effect on 11 January. According to a short stock market statement by the operator, Dong did not quit because of a disagreement with the board and “there is no matter relating to his resignation that needs to be brought to the attention of the shareholders of the company.” Dong had been the CEO since early 2017. 

The low-earth orbit (LEO) satellite sector is already awash with big (mainly American and European) organisations, such as SpaceX/Starlink, Eutelsat OneWeb, Lynk Global, Project Kuiper and AST SpaceMobile, launching major constellations, but China is determined not to be left out of the broadband-from-space race. Nikkei Asia (subscription required) reports that state-owned China Satellite Network Group plans to launch 13,000 LEO satellites into orbit during the next decade or so in order to ultimately support 6G services, while a space company partly owned by the Shanghai municipal government plans to launch 12,000 LEO ‘birds’, and private company GalaxySpace (Beijing) Technology is planning a constellation of 1,000 LEO satellites. The western LEO players are some way ahead of the game, though: As we reported on Thursday, SpaceX this week used its Starlink satellite constellation to send and receive its first text messages over T-Mobile US network spectrum using one of the direct-to-cell satellites the company launched six days earlier. The satellite communications sector has been reinvigorated during the past couple of years – to get up to speed with some of the key developments, check out The most popular satellite connectivity stories of 2023.

NTT Docomo is exploring the use of electric vehicles (EVs) to power base stations in the event of power outages caused by disasters. In a demonstration experiment that began today and will continue until 30 June, the Japanese telco, together with automobile leasing company Nippon Car Solutions (NCS), will test a base station power recovery system using EVs, which are expected to become more commonly used as corporate vehicles. The system will use NTT Docomo’s energy management platform to monitor and control base station power, as well as the company’s AI-based vehicle dispatch planning that was created using deep reinforcement learning, and real-time data from EVs (such as location and stored power) collected by NCS. “The objective is to efficiently dispatch optimally located and charged EVs to power-downed base stations,” the telco explained in a statement unveiling the move. Currently, during power outages, base stations use backup batteries for a limited time to provide communication services and turn to generators in the event of extended blackouts. NTT noted that its experiment is part of the EV100, a global initiative to accelerate the transition to electric vehicles, of which the telco is a member.

Video streaming giant Netflix has reportedly attracted more than 23 million monthly active users of its ad-supported tier. Multiple media reports cited Amy Reinhard, the company’s president of advertising, as providing the figures and adding that scaling the platform’s business was its biggest priority at the moment. The ad-supported plan had increased its user base by 8 million in about two months, after reporting 15 million monthly active users for the plan in November 2023. The ad-supported tier, called Basic with Adverts, is cheaper than the other non-advertising-supported offerings by Netflix and was introduced in November 2022 in Australia, Brazil, Canada, France, Germany, Italy, Japan, South Korea, Mexico, Spain, the UK and the US. Netflix reported improved results for the third quarter of 2023 when it claims it added 8.76 million global subscribers, hitting 247.15 million in total, after booking persistent declines in the previous quarters.

Deutsche Telekom (DT) is preparing to commercially launch its “cell tower to go” solution in the first few months of 2024, following successful tests of a prototype conducted with “a dozen” companies in industries such as construction, real estate and postal services. The German operator premiered the solution at the Digital X event in September 2023, where it used what it claimed was a “smaller, lighter and more flexible” mobile transmission mast that supports 5G and LTE. DT stated that its offering is a temporary mobile solution, ideal for company premises, large construction sites or events, adding that it is so compact that it can be fully set up by only one person in less than an hour. According to Klaus Werner, managing director of business customers at Telekom Deutschland, the “high demand” from enterprises has shown the need for a flexible mobile communications solution. You can find out more from DT’s statement, available here in German.

- The staff, TelecomTV