Voice Modem Shipments Soar Because of Cable VoIP Rollouts
In a sign of growing VoIP deployments by cable operators in the U.S., Canada and elsewhere, equipment supplier shipments of voice modems are soaring to record levels. In fact, cable voice modem shipments are surging so quickly that some vendor executives predict they could surpass shipments of ordinary data-only modems sometime in the new year.
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The trend is clear in the latest quarterly data compiled by industry analysts. In the 3rd quarter, worldwide vendor shipments of embedded multimedia terminal adapters (e-MTAs), or voice modems, jumped by about 550,000 units to nearly 2.1 million units, according to Kinetic Strategies. That amounts to a 36.5% increase from 1.5 million units in the 2nd quarter, and almost a 100% increase from nearly 1.1 million voice modems in the first quarter.
Thanks to such strong growth, e-MTAs accounted for almost 1/3, or 32.5%, of all DOCSIS cable data and voice modem shipments by the leading equipment suppliers in the summer quarter. That marks a significant increase from a 27.6% share in the 2nd quarter and a 21.1% share in the first quarter, Kinetic Strategies said.
Voice modems also generated the lion’s share of the increase in overall cable modem and e-MTA shipments in the 3rd quarter. Total DOCSIS device shipments jumped by more than 800,000 units (15.7%) to slightly more than 6.3 million units in the quarter. E-MTAs accounted for more than 500,000 units of the increase, according to Kinetic Strategies.
Arris dominated the e-MTA market in the 3rd quarter, shipping about 865,000 integrated modems and IP telephone adapters around the world, Kinetic Strategies said. Arris’ voice modem shipments rose a stunning 52.2% over its 2nd quarter numbers, solidifying the vendor’s position as the e-MTA market leader with 42.1% of the worldwide business. Motorola captured the number-2 spot in worldwide shipments, moving 476,000 units for a 23.2% market share.
With such major N. American cable operators as Comcast, Charter and Cox accelerating their VoIP deployments now, vendor executives expect to see the voice modem figures rise even further in 2006. They see e-MTAs essentially taking over the cable modem business over the next year as voice modem prices drop down near the level of data-only modems. They also anticipate that cable operators will start installing e-MTAs even in homes that only take high-speed data, in the hope that they can later be sold IP phone service as well.
“We see that tipping point occurring next year, possibly even in the fourth quarter [of 2005],” said Aamer Salahuddin, mktg. mgr. of Texas Instruments, which provides the chipsets for many of the e-MTAs and data-only modems. “We're eliminating a truck roll later on.” Jay Kirchoff, dir.-mktg. for cable modems at Broadcom, agreed. Both his company and Texas Instruments, archrivals in the cable silicon business, recently introduced new, integrated cable modem chips designed especially for e- MTAs and the growing VoIP market as they position themselves for the industry’s next big expansion wave. “Our [cable] operators would like to install a voice-ready modem and then upgrade [their customers] from data,” Kirchoff said. “We're doing everything we can to bring the price point down.”
Kirchoff argued that once voice modem prices sink below $50 a unit (not including a back-up battery), they'll become a much more compelling buy for cable operators. He estimated that e-MTAs now cost at least $60 a unit, as opposed to less than $30 a unit for some data- only modems. “At $45 to $50 [for a voice modem], people are going to take a really hard look at it,” he said. “The closer it is to price parity, the easier it is to do that.”
In another sign of the cable industry’s growing rollout of VoIP, CableLabs approved 5 more new e-MTAs for cable use in its latest equipment testing round earlier this month. The 5 voice modems join 11 others that the industry R&D consortium cleared for use just 2 months ago. CableLabs has now certified close to 40 e-MTAs from numerous vendors under its various PacketCable technical standards.