DSL port shipments hit record high but revenues fall; CMTS shipments up 43%

Ovum: Preliminary results for global DSL (Central Office and remote DSLAM ports) and CMTS shipments for 1Q06 today. EMEA experienced the strongest sequential growth in DSL port shipments. DSL revenues declined significantly due to pricing pressure. CMTS posted the strongest quarter in recent years, with record growth in shipments globally.

1Q06 highlights:

• DSLAM shipments, growth over 4Q05 = 4 percent

• DSLAM shipments, growth over 1Q05 = 33 percent

• CMTS shipments, growth over 4Q05 = 43 percent

• CMTS shipments, growth over 1Q05 = 110 percent

Alcatel, which shipped 6 million DSL ports, remains the dominant broadband vendor on a rolling 4-quarter basis, with 31 percent market share, followed by Huawei, Siemens, Ericsson, Lucent, ZTE, and ECI Telecom.

In the CMTS market, Cisco had a phenomenal quarter, increasing its shipments by 82 percent versus 4Q05 and capturing a 61 percent share of 1Q06 shipments. Cisco remains the market leader with 57 percent rolling 4-quarter market share. Arris, Motorola, and BigBand followed with 20 percent, 17 percent, and 4 percent rolling 4-quarter market share. Arris had a great quarter, with shipments growing 14 percent sequentially, while Motorola's shipments fell by 14 percent. BigBand shipments grew by a huge 130 percent. There was growth from all regions, particularly EMEA and North America.

'Solid growth in high-speed subscribers, IPTV initiatives, and the need to increase bandwidth to end users are contributing to growth in both the DSL and CMTS markets, especially in North America and EMEA,'. 'But pricing pressure is hitting revenues badly. We estimate that DSL revenues are now down to 2003 levels.' DSL port shipments hit record Publ 20060710