World DSL sales up, but revenues drop

The worldwide market for digital subscriber line (DSL) equipment witnessed strong growth in the second quarter of 2003, with the Asia Pacific and Latin America regions topping the charts, according to preliminary results from the research firm Gartner.

However, average vendor revenue per port has dropped from $95.9 in the first quarter of 2003 to $84 in the second quarter.

"Cost is clearly the key in the DSL equipment market," Jouni Forsman, principal analyst for Gartner?s telecoms group, said in a statement. "Prices will continue to be challenged. Vendors must continue rolling out increasingly cost-effective equipment, while maintaining future value-added service capability of the platform."

For the third consecutive quarter, DSL gear sales posted record growth. Global sales for DSL access multiplexer (DSLAM) ports reached 9.8 million units, up 81.3 percent from a year ago and 16.5 percent over last quarter. Similarly, shipments for customer premise equipment (CPE) increased 59.5 percent compared with last year and 16.2 percent over the last quarter.

Gartner said Japan and North America registered declines in sales growth. "The regulatory situation in the United States is difficult, and the competitive power of cable is strongly felt. Major incumbents are also looking into fiber as a DSL alternative," the research firm said.

Vendors should expect the European and Chinese markets to be the major growth drivers for the next few quarters, the firm added.

"China will continue to increase in importance as an individual key market," said Gauri Pavate, principal analyst at Gartner?s telecom group. "CPE shipments will have to increase to catch up with the installed base of central office (CO) ports, and the unit growth on this side of the business will be stronger than CO in the future."