DSL Port Shipments Surge to Near Record Level despite Sharply Lower Subscriber Additions

Strong Shipments to China for Alcatel-Lucent, Huawei, and ZTE

Redwood City, Calif. – August 19, 2008 – According to a newly published report by Dell’Oro Group, the trusted source for market information about the networking and telecommunications industries, PON Optical Line Terminals (OLTs) revenue increased over 50 percent in the first quarter of this year, driven by a surge in EPON and GPON deployments. This increase occurred at the same time that Cable Modem Termination Systems (CMTS) revenue increased by 30 percent.

“On the surface there appears to be a disconnect between the higher port shipments and lower subscriber additions,” said Tam Dell’Oro, President of Dell’Oro Group.  “But further analysis indicates that much of the growth was driven by shipments to China where the government mandated limited network growth in the third quarter due to the Olympics.  This resulted in 50 percent higher sequential port shipments to China in the second quarter where advanced buying occurred.  We believe a correction is likely in the second half of the year driven by limited shipments to China in the third quarter and lower demand in established regions resulting from slowing subscriber additions,” Dell’Oro added.

The report also shows that the three companies accounting for most shipments to China were also the market leaders.  Alcatel-Lucent remains in the top spot followed by Chinese manufacturers Huawei and ZTE.

About the Report

The Dell’Oro Group Quarterly Access Report provides complete, in-depth coverage of the market with tables covering manufacturers’ revenue, average selling prices, and port/unit shipments for Cable, DSL, and PON equipment. Network infrastructure equipment includes Cable Modem Termination Systems (CMTS), Digital Subscriber Line Access Multiplexers ([DSLAMs] by technology ADSL, G.SHDSL, and VDSL), and PON Optical Line Terminals ([OLTs] by technology BPON, EPON, and GPON). The report also covers Cable and DSL Customer Premises Equipment (CPE) technology and PON Optical Networking Terminals (ONTs). To purchase this report, call Emily Kendall +1.650.622.9400 x223 or email Emily@DellOro.com.

About Dell’Oro Group

As the trusted source for market information about the networking and telecommunications industries, Dell’Oro Group provides in-depth, objective research and analysis that enable component manufacturers, equipment vendors, and investment firms to make fact-based, strategic decisions. For more information, contact Dell’Oro Group at +1.650.622.9400 or visit www.DellOro.com.