DSL Prime: Subscriber Numbers

Whitacre claimed that SBC "delivered the most DSL customers the industry has ever seen." U.S. deployment per capita now is worse than any nation where prices are competitive.

by Dave Burstein DSL Prime [May 7, 2003]

Yahoo Japan +682,000
NTT fighting back
In January, Yahoo added 281,000; February, 210,000; March 181,000. NTT is meeting the 7.5 yen VOIP with a 8.5 yen service that will cannibalize revenues, offering promotions like two months free, and I'm told has runners in the street in Tokyo handing out install offers and CDs. Yahoo end of March had 2.36 million DSL subs, close to NTT's 2.557 million (and 200,000+ fiber subscribers.

China Telecom +580,000
800,000+ quarter for country
Chinese demand was so strong Q1 that the entire world hit a temporary chip shortage. China Netcom was also a large equipment buyer. If they did even close to China Telecom in their third of the country the Chinese quarter total was over 800,000. Chip sales suggest independents are also deploying VDSL from basement DSLAMs, but I have neither confirmation nor figures. Unless SARS devastates the Chinese economy, CT will pass SBC in world rankings this summer. They're targeting 4.5 million at the end of 2003. China Netcom is aiming at 2 million yearend, and has just capitalized a joint venture at $100 with Softbank/Yahoo BB and IDG in the U.S.

Individual provinces within the Chinese giants choose their own suppliers. Alcatel/Bell, Huawei, ZT, UTStarcom, and Nokia have been strong, and Hermann Rodler of Siemens tells me they shipped 100,000 ports as well.

Korea Telecom +325,000
500,000 VDSL, 1,500/day Wi-Fi added
Since Korea passed 10 million broadband connections (70 percent of homes), I've been joking the numbers couldn't go up any more. I was very wrong. KT added 325,540 during 1Q 2003, whereas it was only 218,605 during 1Q 2002. Hanaro and KT are competing with the largest VDSL deployment in the world, with speeds about to jump from 20 Mbps to 50 Mbps with a new generation of chips.

Fashionable Koreans are all carrying PDAs to log on to KT's 8,500 hotspots, with 8,000 more due by the end of 2003. Low monthly prices at KT and Japan's Yahoo BB ($7.50) are driving extraordinary sales, typically sold bundled with DSL.

Bell Canada +96,000
1.2 million subs, penetration twice U.S.
The price rise from $28 (U.S.) to $32 (U.S.) is cutting demand, but the Canadians are still by far the leaders in North America in per capita DSL penetration. Bell Canada had a much better quarter than SBC, when adjusted for lines or population. EastLink Cable has seized 20 to 30 percent of telephony customers in their territory, impelling Bell Canada to move faster than U.S. peers. They've now paid off SBC for the 20 percent shareholding, and put behind them billions in Internet era losses, so expect them to get on track again with previously announced expansion plans.

In Western Canada, Verizon controlled Telus is also feeling pressure from cable and is rapidly expanding their DSL coverage. They are going to Critical Telecom for upgrades to remote terminals in large volume, and adding video. They've sustained massive losses on wireless acquisitions, especially, some of which are still impairing the balance sheet, along with rapid decline in LD. Cost cutting has been heavy and controversial, with a strike possible, so they have strong incentive to find growth instead.

SBC's Whitacre: 270,000 is great
"delivered the most DSL customers the industry has ever seen"
Stop cursor, please. I put this article aside to get opinions from readers. Whitacre also said SBC was the leader in the industry. I don't think our industry ends at the Mexican or Canadian border, and that the many extraordinary and hardworking SBC staff aren't able to do as well as NTT, DT, KT, Bell Canada, Chunghwa, and others.

Loops are longer, but U.S. performance is weak even after correcting for that. Are the U.S. telcos and the D.C. policy folks right that the U.S. should have lower goals, or is that beltway blindness and telco complacency?

E-mail me whether in the next issue of DSL Prime I should write, Will someone please brief the CEO?.

NTT: 9,000,000 more in three years
Fiber and VDSL to compete with Yahoo BB, Vodaphone, and cable
NTT President Norio Wada has lost 2,000,000 phone customers to Yahoo BB VOIP, and is fighting back by matching that offering at 8.5 yen for 3 minute calls to the U.S. Wireless power KDDI and ISPs like Fujitsu-Nifty are doing the same, the government is promoting an interconnection requirement, and income from voice is imploding. Cable is experimenting with 30 mbps Terayon equipment, Wahlman reports.

50 Mbps VDSL is set to roll in volume, as well as $3 billion a year of investment in fiber.

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

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