DSL Prime: Do You Get It? It's a Video Future!

As European telcos roll out advanced services, the dated equipment the U.S. bells still use may soon be unsupported.

by Dave Burstein of DSL Prime and Future of TV [November 30, 2004]

Belgacom VDSL, video, 25 percent of homes
Belgacom just signed their millionth sub, a quarter of all homes in the country. With cable also active and CLECs winning a large share in Holland, they are aggressively upgrading their network to stay ahead. Microsoft and Swisscom are getting the TelcoTV headlines in Europe, but Belgacom is far ahead with actual deployment, soon going wide across the country. 1,000 Linux-based IPTV STBs from i3 Micro are being deployed in Ghent, Brussels, and Liege, with software from Myrio and a video browser from Espial that creates a walled garden, Linux Devices reports. Alcatel is supplying DSLAMs, Siemens the video integration. The next Future of TV will feature Microsoft vs. the Rest of World, as suddenly Microsoft's IPTV has become the one to beat.

Belgacom's pricing of 59.90 Euro for 9 Mbps down, 400 Kbps up with an offensive 15 gig cap will only hold so long as competition is weak. In Paris, Free.fr is offering 15 Mbps down, and better upstream, with ADSL2+ for half the price.

Surprise leader Bell Canada
Video in volume, penetration far higher than U.S.
"I've been traveling lately," an SBC worker mentioned, with Seattle, Raleigh, and Canada common destinations. Alcatel in Raleigh and Microsoft in Seattle are major suppliers, but Bell Canada's central role was as a model of success. Their leadership in video over DSL, serving thousands of demanding customers, drew experts from the other telcos to learn how it's done. Bell is serving hundreds of buildings with full video service and winning as many as half the customers from cable. The Motorola Next Level gear is costly but reliable, and has solved many of the nagging problems in video delivery. Canada's lead in broadband over the U.S. has been obvious, with take rates higher and prices dramatically lower. That performance made a bad joke of FCC claims the U.S. was doing well, and inspired me to suggest a while back the best way for someone in Chicago to get broadband at a decent price was to move north.

Bell Canada, Glen Campbell notes, is facing increasing competition from cable telephony, with 6 percent of lines in Toronto switched over, as well as 17 percent in Eastlink territory.

TI, Alcatel cutbacks amid success
"We hope none of our people have to leave"
Alcatel's $1.7 billion contract with SBC is for a massive network rebuild on an exceedingly tight time frame, and they have high hopes to sell similar to BellSouth and Qwest. So I was amazed they are cutting staff in Petaluma. Sure, demand for the TDM remote terminals from Petaluma is disappearing in favor of IP, so stopping development work on the 7201 is a sensible step.

But to service SBC, Alcatel is going to need every experienced pro they can find. Serge Tchuruk has been playing a risky game for several years, selling the plant in Raleigh and dropping some of his best people. So far, the relationships with key customers have been challenged but remain strong. However, at some point, the bells will demand more backup closer at hand.

Even more surprising is Texas Instruments' cutbacks of their DSL team. TI chips have been doing well. Sales of modem chips have ramped strongly over several years, after a late start in the DSL market. They've created enormous buzz for UDSL, the next generation VDSL chip with an unbeatable feature set. A year before the chip is ready, it seems a frontrunner for hundreds of millions in sales at SBC and others. TI is the first big company to step in to the 100 Mbps DSL world, pioneered by Ikanos and Metalink. Their PR campaign, backed by ads in DSL Prime and essentially all key media, pulled TI to the top of customer perception. This note from TI has a positive spin:

"TI DSL is consolidating to a single engineering organization and a single interoperability lab as a result of a reorganization. San Jose has become the DSL development Center of Excellence, and as you know, the primary interoperability lab is located there. A single team will result in closer collaboration improving efficiency in development and support. It is true that some engineering positions will go away."

Some TI staffers involved might be encouraged to hear:

"However, the goal is to place as many people within TI as possible. The announcement was made last week and impacted engineers are already finding new positions within TI. This was a reorg and employees that were impacted remain on TI's payroll today. Since the process isn't complete and these engineers are still finding new jobs within TI, it's difficult to provide an exact number of employees who might leave TI. We hope none of them do."

"TI is still committed to the DSL market. We continue to invest in DSL and Broadband, we are introducing new extensions to our platforms and the DSL and Broadband business is growing. In addition, we've invested over $6 million in the San Jose interoperability lab and will continue that investment next year."

Next issue, I'll have an update on UDSL after an interview with Peter Chow.

Companies cutting back always speak hopefully of their future, and look to minimize current problems. Neither of these companies would give me concrete details on employment numbers. As a result, I can neither confirm nor deny the rumors circulating that the layoffs were large.

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

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