DSL Prime: Canada Beats USA

Coverage in the U.S. is growing, but Bell Canada has the U.S. telcos beat.

by Dave Burstein DSL Prime [November 3, 2003]

Eugene Roman: Bell Canada to 90 percent
Will clear the "service black holes"
Bell intends to stay at the top of North America. "VDSL has great traction" Roman tells me, mostly in Toronto high rises not suitable for Bell's ExpressVu satellite video. They now are pushing fiber deeper, within 1 to 2 kilometers of most homes, and installing 6 to 12 Mbps service at jumper wire interfaces.

The best way for someone in Chicago to get good DSL service for a fair price, I wrote a while back, was to move to Toronto. The Bells have improved since then, but Bell Canada is beating cable, added 104,000 DSL lines Q3, and has 1.391 million DSL subs out of 13 million lines. BellSouth, by comparison, has 1.336 million out of 20 million lines. Look North, O smart executives.

Lucent's remarkable fiber fed, line powered 144 ports
Eugene Roman is enthusiastic about Lucent's new compact Stinger, which he'll be deploying from within a kilometer or two of most customers. Line-powered, with three 48 port boards, it far outclasses most of the remotes the U.S. Bells have been deploying. Lucent supports it with 155 Mbps OC-3 fiber. Stinger supports six OC-3 ports to a board in the CO. Many customers can get 10 Mbps ADSL2 (it's the Globespan chip), meaning numerous video services will be practical. The whole thing is 30 inches high, 18 wide, 12 deep. If the carrier requests, OC-12, OC-48, VDSL, and multicasting are available.

CFO Stephenson: SBC going past 80 percent coverage
4 to 6 Mbps reaching 50 percent
Just add DSM for something really competitive. It's wonderful to correct my March report that SBC was three years late on their planned 2002 80 percent DSL deployment. They now will hit that in Q1 2004, and will keep investing for further coverage. That's great news for the one-third of the U.S. served by SBC. I made the mistake because I believed senior vice president James B. Smith on increased broadband deployment "It's not going to happen. I can't justify it to my shareholders."

Instead of believing a lobbyist, I should have followed my own analysis "Cable telephony is coming—SBC doesn't have any choice." I hope I have to correct more stories because telcos speed their deployment. I also hope to soon report SBC is offering affordable speeds closer to the cable 3 to 6 Mbps. The technical preparations for stage one are ready.

Q3 US close to 800,000
"BellSouth profits buoyed by high-speed internet," headlines the Financial Times. DSL profits kicked in for Korea and France in 2002, and now are becoming crucial for the Bells.

SBC dropped prices for a 12 month package to $29.95 and $26, and demand is picking up. BellSouth held prices up, resulting in net adds still far below 18 months ago.

Verizon's 185,000 net adds were their best since Q4 2001, but disappointing after their price cut and the related heavy advertising spending. They confirmed they should hit 80 percent coverage by yearend, which means the buildout alone should be adding almost 200,000 new subscribers in the second half of the year. It would be too facile to say Verizon is so far behind SBC because of the $30 versus $35 price difference, but I haven't been able to pinpoint why their marketing is so disappointing. With the strike possibility behind them, Q4 should pick up; otherwise, they will need drastic action because there's no basic reason Verizon should be so far behind SBC, much less FT, Bell Canada, or the Asians.

With Qwest, Sprint, Century and others still to report, 800,000 is still possible. Cincinnati Bell was clear on the importance: "Increases in DSL transport revenue offset declines in business local service and special access revenue."

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

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