DSL Prime: So Much Good News for DSL

We anticipate a booming Q3 in subscriber additions as technology improves. But Denarau Island in Nadi, Fiji, a major tourist destination, may soon have better DSL penetration than Vermont or Maine.

by Dave Burstein of DSL Prime and Future of TV [October 12, 2005]

All of Fiji Getting DSL
How about Vermont and Maine?
Telecom Fiji is ready with broadband for Denarau Island in Nadi, serving both resort visitors and residents. Over the next 18 months, they will connect all the islands, according to the web site Fijilive. 55,000 Fijians were regular Internet users in 2003, according to the CIA World Factbook. A per capita income of over $5,000 with a 93 percent literacy rate, as well as 400,000 tourists annually who need to check their e-mail, should create substantial demand.

Explosive U.S. Q3
$15 to $20 prices reverse terrible Q2
"This quarter we had to scramble to keep up in the U.S., when usually our growth is in Europe and Asia. The price cuts are working," said a very happy chipmaker. Randall Stephenson at Goldman called Q2 drops "seasonal," adding the street would be much happier with Q3. I hear similar from two other carriers. "Think records," one tells me.

I'd hate to be EarthLink or AOL selling dialup at $23 when DSL is available in much of the U.S. for $15-$20 on various deals. I'd also hate to be in customer service at the Bells if they raise the $15 price after 12 months. Not clear whether the companies care if customers hate them.

The first hard data on the strong quarter comes from FASTWEB in Milan, up 46,000 to 644,000. They are now can reach on net 7.5 million homes, one third of Italy.

TDC Denmark Invading Sweden with "28 Megabit"
Broadcom extensions for marketing point
TDC Song has jumped into Telia/B2 territory, with DSLAMs in Stockholm and across a third of the country. Telia has been expanding into TDC territory, so this is taking the fight to the opponent. Deutsche Telekom and Telfonica are also building aggressively across each other's territory, France Telecom in the UK, and everybody in Paris.

Proof, if we ever doubted that the "understanding" between the bells not to compete is not a natural corporate strategy. TDC is pricing aggressively at $26 to $40 with no connect fees, and are the first with ADSL2+ type speeds. ADSL2+ maxes out at 24 Mbps, but Centillium paved the way for advertising higher speeds with their ADSL2++ for Japan, theoretically capable of over 40 Mbps. Using Broadcom chips at both ends, TDC can now advertise "28 Mbps."

John O'Neill of Broadcom writes the speed is due to "ATM header compression [which we] ... fully disclosed in contributions to standards organizations." TDC's Michael Edstrom claims the Broadcom chips allow them "to squeeze out another extra 4 Mbps." Most "24 megabit" service is really 10 to 15 megabit, because the top speeds are only hit at very short distances (think 100 to 500 feet) and unusually clean lines. "28 megabit" chips will probably have little real world speed advantage. On the other hand, ADSL2+ continues to suffer from interoperability problems, so matched chips may deliver higher speeds.

650 Schools Prove Market for Bonding DSL, Finally
Over one hundred million dollars of venture capital have been chasing the hotly anticipated market for 5 to 30 Mbps symmetric, bonded DSL. The technology works, and almost everyone in the industry, DSL Prime included, thinks there's a potential market for greater than T-1 speeds where fiber is impractical.

A one-time cost for the boxes on each end, and a modest monthly cost for the loop, make a natural 10 Mbps symmetric Ethernet extender with 2 to 5 lines. Combine 8 to 12, and under the right conditions you can approach a 45 Mbps T-3. Unfortunately, so far, few customers have agreed, with only a handful of deployments worldwide.

Actelis and Microtel have nearly completed deliveries to over 650 schools in the UK, more than doubling the announced deployments of bonded symmetric DSL worldwide. Yossi Saad of Actelis has also landed Qwest as a customer. Hatteras tells Light Reading the other Bells are testing; Saad confirms the active interest.

Copyright 2005 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.

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