DSL Prime News: The Inside Source

AOL is spending $35 million on ads—enough money to double the speeds of every broadband customer—but even that would be slower than the speeds now common in Japan.

by Dave Burstein DSL Prime [March 28, 2003]

Sexy Sharon Stone promised "The World Wide Wow" during the Academy Awards. "AOL for Broadband" spent $2 million+ for "positioning" ads that essentially said nothing. As Saul Hansell pointed out in the NY Times, most customers look first for fast, reliable service. AOL's $35 million broadband ad budget costs about as much as doubling the speeds for all their broadband customers.

Yahoo BB 2 million, Japan over 6.5 million
Passed U.S. in net adds, soon may pass in total
The Japanese government reports 470,000 net new DSL customers in February, leaving them only months away from passing the U.S. in total subscribers. NTT is at 2.4 million, Yahoo BB 2.2 million as they added 281,000 lines for the month. In Korea, net adds for DSL are now low (Korea's broadband take rate is higher than the U.S. broadband plus dialup total, after all) but a trend has begun there that likely to spread. Customers are dropping their ADSL service and replacing it with VDSL. Ivan Seidenberg, when will you give me that choice in New York?

For Japan, Centillium must deliver more
Announce 50 Mbps ADSL, 22,000 feet reach
eXtremeDSLMAX Double-Spectrum (MAX-DS) performance matches ADSL2+ at 24 Mbps. ADSL2+ standard chips achieve that speed with more efficient encoding and using twice the frequency range of ADSL. The result is excellent performance to 8,000 or 9,000 feet. eXtremeDSLMAX Quad-Spectrum (MAX-QS) claims to reach 50 Mbps downstream, which would be possible using twice again the spectrum, for much shorter distances. This would achieve performance comparable to VDSL, critically important to compete as NTT is investing $3 billion in fiber.

Centillium also announced eXtremeDSLMAX Long-Reach (MAX-LR), giving unspecified performance to 22,000 feet (7,000 meters). Many chipmakers have been researching how to maximize long distance performance, and the consensus of engineers is that 20,000 to 22,000 feet is achievable. Carriers around the world are frustrated with the revenue lost from unserved customers. To add icing on the cake, eXtremeDSLMAX Extended-Upstream (MAX-US) increases upstream rates to up to 3 Mbps.

Chipmakers since last fall have been competing for the extravagance of their press releases. The industry is closely watching what the results will be in the field. I'd welcome comments—on and off the record—from equipment manufacturers and especially carriers who have tested the new chips.

TI 2 million ports to China
Market as big as the U.S.—and growing
China by 2005 will have well over 200 million wired telephone lines and expects 200 million Internet users as well (some at school and neighborhood kiosks). That makes them by far the largest market in telecom, with an extraordinary potential demand for DSL service that is just starting to explode. TI has been there from the beginning, working with ZTE, Huawei, and Harbour while premier TI client Siemens is also targeting China strategically for DSLAMs. The result is they now claim over half the CO chip market, or 2 million + of the 4 million central office lines enabled in 2002. Alcatel delivered 1 million DSLAM ports, Ericsson and Nokia both announced provincial wins, and UT Starcom broke into crucial account China Netcom.

He Zhiqing of China Telecom told the Berlin conference last fall they had installed 2.3 million DSL subscribers and would be over 3 million by yearend, but reliable statistics out of China have been few. Point-Topic, generally highly reliable, has a yearend total of just over 2 million subscribers, and TI's number is similar. I suspect some of the discrepancy is that many of the customers are connected through basement units and are classified by some as "LAN" customers. This is becoming a data problem as Infineon's Ethernet over VDSL is now selling enough units to affect the statistics, as it has in Korea. I would very much appreciate people who can help me find accurate data on China.

Linksys bringing Cisco home
Add phones and a wireless home video network
Danny Briere of TeleChoice speculates, "This one is exciting, because it's far more than Cisco buying a low end distribution channel. Both Cisco and Linksys are ready to deliver a wireless home network that goes far beyond a simple router. The wireless home backbone is emerging. At CES, I saw the solution to the cordless phone/home wireless data network signal interference problems—running voice over 802.11 at what can be better than pin-drop digital quality. Both cordless phones and 802.11x networks use the 2.4 and 5 GHz frequencies so they interfere. So migrate cordless phones to 802.11 and VoIP and the interference is gone. Enable your cell phone with 802.11 to work as a high-quality cordless connection when at home. Run MP3's and video around your home over the same wireless home backbone."

Danny pointed to Rockford's Omnifi car servers and RCA Lyra as the logical next step for Linksys/Cisco, downloading music and video overnight when parked in the garage from your home Wi-Fi network or streaming from your PC to your A/V equipment—both broadband drivers.

Briere and broadband analyst Pat Hurley at TeleChoice just finished writing "Wireless Home Networking for Dummies", which will find an enormous market as access points drop to $30 or $40 in the near future. Digitimes reports 802.11b PCI cards are selling for $17 in Asia, and the chips themselves are now under $10, as Asian chip houses try to win sockets away from Intel's Centrino push. The "common wisdom" is that b is cheap now, but will migrate rapidly to a compatible g as multiple sources deliver standards compatible chips.

"Almost every consumer products manufacturer we can think of is wirelessly enabling their home appliances and products for follow-on subscription based services," says Briere. "They're no dummies."

Copyright 2003 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.

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