Like auto shoppers facing a dearth of choices or homeowners deferring a smart appliance purchase, broadband providers are needing to adapt to the worldwide shortage in silicon chips impacting broadband network equipment that is hobbling a return to business as usual.
Intel, Broadcom, NXP and Flex all have dampened expectations for a rapid resolution to the chip drought, in some cases suggesting that it will continue for another 18 months or more. For broadband providers who had been considering network reconfigurations, extending the life of existing plant in the face of potential supply shortages may be needed to accommodate higher volumes of traffic as a result of pandemic growth.
When you combine per-subscriber data usage of 482.6 GB at the end of last year with the influx of new subscribers every operator experienced, the real increase in traffic on broadband networks increased 51%. Despite a seasonal decline in Q1 2021, we expect consumption to be within the 600-650 GB range by the end of this year.
Operators have aggressively addressed that demand over the past 15 months, but the chip shortage is likely to restrict new plant improvements for the foreseeable future. “What we do see in broadband is service providers, the telcos in particular, are for sure upgrading,” says Broadcom CEO Hock Tan. “And we see the backlog associated with it through 2022.”
Operators whose near-flawless networks kept all of us connected during the pandemic simply can’t wait that long to resolve growth issues. With nearly 10% of subscribers now provisioned for gigabit-speed services, increased pressure on the upstream, and more than 12% of subscribers now consuming 1 TB or more, broadband providers need to consider alternate solutions that can help them maintain customer satisfaction and add new subscribers
We believe network management solutions are smart business in any environment, but never more so than now. In the short term, solutions that provide real-time insights, analyze traffic and address immediate congestion concerns may reduce the need for operators to make costly changes at today’s inflated prices – if the equipment components are available at all. In the long term, operators may find that the increased ability to see and manage traffic conditions can reduce the need for expensive reconfigurations.
In most cases, consumer goods purchasers can wait out the chip shortage, but broadband providers do not have that luxury. As operators continue to the impact of pandemic growth, we believe they would be well served to implementing solutions that can fortify existing plant capabilities while the kinks in the supply chain work themselves out.