DSL Prime News Briefs

DSL industry news from around the world, including South Africa, Japan, and Finland.

by Dave Burstein DSL Prime [August 20, 2004]

e-mail

• From South Africa, P. writes, "I just bought the 4 GB ADSL capped non-shaped dialup package—cost US$100 per month on top of my US$100 basic 512k ADSL charge. When is somebody in Telkom or the SA government going to realise how economically damaging this is to South Africa??? Dave—some publicity on this would be great. We need to educate the SA public on basic bandwidth economics - which are not so damn complicated at all." Now that Telkom is shedding their SBC ownership, I hope they will do better at serving South Africa. They own a significant share of the Africa undersea cable, and presumably can buy backbone bandwidth at a reasonable price. There's no excuse for giving the South Africans inferior DSL service at a high price.

Briefs

• Japan's net adds in June, 247,000, and July 257,000, were the lowest in over two years. Some of the decline is a shift to fiber to the home (which includes some VDSL/fiber to the basement.) Yahoo BB had 95K in June, suggesting Masayoshi Son will soon have to launch the "secret plan" he promised a while back. One possibility is to use his Japan Telecom acquisition to aggressively offer fiber from the basement/VDSL. That might be one of the world's first large EFM builds, with Extreme Networks an early lead on the contract.
  
  
• Qwest added 109,000 to 853,000, as they are deploying 2,000 remotes to fill in their footprint. They still expect to leave 35 percent uncovered at yearend, twice as many unserved homes as the other Bells. Qwest's expanding losses have been often reported, but the return on investment in DSLAMs is now so fast even Oren Schaffer is spending the capex dollars.
  
  
• BT passed 2.7 million wholesale broadband lines by June 30, 2004, an increase of 154 per cent on the number of connections 12 months ago, with net additions in the quarter growing at more than 36,000 per week. BT Retail had 1,102,000 broadband connections at June 30, 2004, an increase of 98 per cent on June 30, 2003.
  
  
• D-Link's days inventory ballooned in 2Q04 to 99 from 89 in 1Q04, William Bao Bean notes, one more datapoint to suggest that Q2 slowed down in many markets.
  
  
• TeliaSonera added a disappointing 17,000 to 440,000. Citizens, a troubled U.S. regional, reached 164,000 DSL subs with 22,200 added Q2.

Press

• DSL Reports continues to be a pleasure to read for honesty and humor. Latest on Wimax, which Intel has promoted and virtually created, begins "Intel makes investors happy with PR push." Then they pick up a comment from the lead hypemeister, "'We try not to talk too much about [Wimax]' says Intel's spokesman," and the reality "whose company has been promoting the future wireless broadband technology in ways that make low-carb marketing seem subdued." There's an appropriate buzz about fixed wireless, including a go-ahead for Alvarion at British Telecom. But growing beyond niches will require a drastic overhaul of spectrum rules, which Intel and other power players minimize in both lobbying and promotion.
  
  
• Jim Glassman is so committed to advocacy he's giving up his column in the Washington Post. Glassman's a key free-market voice for strong regulation, a consistent policy if you recognize that competition doesn't work without competitors. In the real U.S.A., the telco/cableco pair will almost surely beat off everyone else unless the government works actively to open the market. He writes with the opinion "Look at what has already happened in the wake of the administration's terrible decision not to appeal the UNE-P decision to the Supreme Court. Competition is evaporating, and prices for consumers will rise sharply."

People

• Steve Ellwood is leaving LSI Logic to become VP, Engineering at UWB startup Artimi in Cambridge, where he joins former Virata colleague Tom Cooper. He writes "It's been an interesting 9 years in the DSL industry, and I've seen DSL go from a dream to a mass-market reality. I like to be there at the birth of new technologies and, as you pointed out, ADSL2 is starting to ship so I believe we are at last in a true commodity position and my job is now done. Scarlett Wu is taking over the product marketing position at LSI. Artimi is working on the next link in the chain of getting high-speed data where it is needed into the various devices in the home. Now that ADSL2+ and VDSL can deliver video we need a fast, reliable method of getting the bits into the various devices. I believe that UWB is the wire-replacement technology needed to make this happen."
  
  
• Tim Waters, one of the easiest to admire guys in the business, jumps to SkyStream to expand the market for their video offerings. Roger Dorf has also left Celite, joining Navini.

Wall Street

• James Enck of Daiwa is consistently among the most interesting European analysts, tracking VoIP and Skype well before others caught on to the importance in Europe. He has an amazing juxtaposition writing up the news from BT. "BT Group has, in our opinion, the most forward-looking management team and strategy in the sector, probably globally." He then goes on to lower his rating to underperform, looking at the troubles of the traditional phone business dragging them down.
  
  
• Occam sold $3 million of remotes in Q2, and continues to win customers. A problem, which they believe is now solved, has been "product failures caused by severe power surge events, including lightning strikes, particularly when the BLC 6000 has been deployed in areas of high storm activity or insufficient power and grounding."
  
  
• "Catena's July quarter sales of ~$15 million were roughly $5 million less than already-lowered expectations," Marcus Kupferschmidt of Lehman notes in an 8/4 research report. I note Catena's sales to date have mostly been for upgrading old SLC remotes, but that market is finite, and higher performance baby DSLAMs often a better choice. So prospects for the division depend on finding customers for their own remotes in an intensely crowded market. Alcatel, AFC, Adtran, Nortel (with Calix and ECI), and Lucent (who have customized the Stinger for Bell Canada) all are targeting the market. Gary Morgenthaler, possibly the best-informed and most effective VC in networking, did a remarkable job first guiding Catena and then arranging a profitable sale to Ciena. Beyond the current run of contracts, Asian vendors including Samsung and UTStarcom are offering great prices, while Siemens has a unit from Dasan that may be just right for SBC's next wave. Note that SBC and probably Verizon are considering moving to pure IP, really soon now.

Copyright 2004 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.

"The power of the printing press belongs solely to those who own the presses"
—A.J. Leibling

The Internet is the cheapest printing press ever invented.