DSL Prime: The Results Are In

DSL Prime provides DSL subscriber numbers for the U.S. and Canada and also discovers perplexing data on DSLAM sales.

by Dave Burstein of DSL Prime and Future of TV [September 7, 2006]

Q2 U.S. subscriber numbers
Far down from Q1, up from Q2 2005
FIOS is now adding 100,000 customers per quarter, accelerating, which is not included in the numbers below. Including FIOS, Verizon's growth is much better than AT&T's. Verizon, until this quarter, only provided a mixed total of DSL and FIOS customers; they now have enough FIOS subscribers to break that out without embarrassment. Anyone analyzing DSL and broadband numbers will now have to be careful, especially when making historical comparisons.

AT&T 342,000

Verizon 329,000

BellSouth 128,000

Qwest 120,000

Embarq 72,000

ALLTEL 40,000

Century Tel 27,000

Citizens 20,000

Cincinnati Bell 6,000

Commonwealth 3,000

Ten million AOL users will soon switch to broadband, carnage that should provide another decent year or three feasting on the remains of dialup. AOL controlled a third of the internet in 1999 when I began DSL Prime, so it's particularly painful to report the company that was AOL and provided internet service is disappearing. 5,000 more people are being fired, AP reports.

The surviving company is focused on selling eyeballs to internet advertisers, a different and much smaller business. The crucial difficulty they face is that the most profitable advertising is to people considering buying products, a common google search. AOL folks checking their e-mail or watching old TV are not nearly as interesting to the ad buyers. AOL's best possible future is to become a mini-Google or Yahoo, a perfectly sound business, to which I wish them the best of luck.

Canada:

Bell Canada 47,000

Telus 29,000

Price rises at Bell improve the bottom line but hurt growth. Videotron, the low priced cableco, is doing well.

Q2 DSLAM Sales
This worldwide sales ranking is from Dell'Oro, whose researchers are visiting New York in September. The comments are exclusively mine.

1- Alcatel shipped a record 6.7 million ports according to Dell'Oro and are still dominant with a just over a third of the world market.

2- Huawei also shipped a company record 2.6 million ports, although their revenue share of the market is lower because of lower prices.

3- Siemens fell off after a strong Q1, I believe driven by DT. DT is running their "50/10" VDSL network at 25/5, while waiting for Microsoft to deliver more of the functionality promised for IPTV.

4 -Ericsson IP DSLAMs continue a strong year. They won a role in DT by providing an ideal product for small facilities. I have their 8 port DSLAM the size of a paperback book, which I hold up when telcos claim it's impractical to serve small territories. I'm overdue in writing up the company, whose Marconi MSANs just got a rave review from a customer's CTO.

5- Lucent

6- ECI is finding strength in France Telecom with video, and stands to benefit when DT resumes deployments.

7- NEC maintains the highest profile of Japanese suppliers outside of Japan.

8- Sumitomo

9- UTStarcom was up 200,000 ports over the previous quarter.

10- Fujitsu

Todd Koffman of Raymond James observes that North American telcos have installed eight million more ports than they've added subscribers in the last six quarters, including 3.4 million in Q2, over 2 million more than they added subscribers. No announced upgrades or network expansion explains these numbers. Broadband Trends reports Alcatel's 1.9 million ports represented over half the market and Lucent about 15 percent. Adtran, Tellabs/AFC, Calix, Zhone, Ciena and Occam follow, all under 10 percent.

Copyright 2006 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.

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