And the good times for broadband equipment suppliers should only get better. Broadband equipment factory revenue is set to grow to $15.1 billion by 2011, up from $11.2 billion in 2006, according to iSuppli Corp.  

“The ADSL market is headed for a major inflection point when existing subscribers begin to upgrade to higher-speed services,” said Steve Rago, principal analyst with iSuppli. “This has happened in Japan already, as many service providers have migrated to fiber-to-the-home (FTTH) technology, which offers consumers a 15 times increase in bandwidth compared to ADSL.”

France Telecom and Free/Iliad of France already have announced plans to deploy FTTH, while other operators are evaluating the technology, as well as deep-fiber with VDSL, as the final broadband link to consumer residences. This bandwidth upgrade will help keep broadband equipment sales on the rise for the next five years, Rago said.

Household broadband penetration is expected to exceed 50 percent in the United States and Japan for the first time this year, and will do so in Europe in 2008, iSuppli predicts.