The spike in demand for Internet protocol TV (IPTV) and broadband-based video service is a major factor spearheading growth in the world xDSL test equipment market, according to analysis from business advisory firm Frost & Sullivan. High bandwidth requirements for IPTV and customers’ higher expectations of service uptime are forcing service providers to purchase the latest test equipment and service monitoring tools. The study, World xDSL Test Equipment Market, finds that the market earned revenues of $279.0 million in 2010 and estimates this to reach $545.7 million in 2016.
According to Frost & Sullivan, the IPTV network infrastructure is complex with many protocol layers, including the physical layer, asymmetric digital subscriber line (ADSL) layer, and IP layer, present between the video source and the subscriber’s TV. As the video stream passes through these various protocol layers, it is prone to audio drop-out, pixelisation and distortion. Service providers understand the need to perform network testing to identify the exact location of faults in the network before those faults affect their customers.
“Simple DSL metrics are no longer sufficient to support QoE, which has resulted in an upsurge in demand for multilayer test equipment capable of testing the triple play architecture (voice, video and data) in real-time,” says Frost & Sullivan Senior Research Analyst Srihari Padmanabhan. “Due to heavy competition in the service provider segment, QoE and QoS in the broadband service market will assume great importance in the future and enable growth in the xDSL test equipment market.”
Wireless broadband technology is witnessing significant activity. Factors such as convenience (mobility), cost of deployment, and bandwidth are pushing subscriber migration from DSL to wireless broadband technology. As network equipment manufacturers develop advanced routers and modems to optimise the reach of wireless technology, the DSL technology market is expected to be negatively impacted, restraining uptake of new xDSL test equipment.
As service providers mull significant capital expenditure (CAPEX) investment in evolving technologies, such as high bandwidth video-based services, market uncertainty necessitates careful analysis of the expected return on investment. Furthermore, a sudden demand shift for a specific DSL variant might affect a service provider’s business.
As the telecommunications space is witnessing fast-paced evolution, test equipment vendors must avidly invest in developing new products and technologies to cater to changing end-user requirements.
“The xDSL test equipment market is highly competitive, with many Tier-1 companies active in the market,” says Padmanabhan. “This leaves manufacturers with little control over pricing, which results in reduced profit margins.”
As a result of pricing pressure from customers, Frost & Sullivan suggest that test equipment vendors must revise their own pricing. To be successful in such a scenario, participants must perform a careful analysis of the expected return on investment and leverage their market intelligence information to tap opportunities that lie latent in the market.