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Allied Telesyn Debuts DSLAM Drama

Light Reading
News Analysis
Light Reading
6/23/2003
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Allied Telesyn Inc. is making a strong push for new customers in the North American carrier access space.

Although the company isn't very well known in the United States, it's a signficant power in the Asian markets, counting NTT Communications Corp. among its largest customers. Company officials say it generates more than $500 million in revenue. With new IP-based DSLAM products, it's clearly aiming for more business in North America.

The 16-year-old networking equipment vendor has a good-sized installed base of hubs, switches, routers, and residential gateways. But today it announced two new IP-based DSLAMs, as well as plans to roll out several new access products in the coming months, including customer premises gateways, broadband delivery systems, and a software suite that controls the whole lot.

The company says its new products -- the AT-TN7700 and AT-TN7400 -- are designed for RBOC networks, but it will first target smaller independent operating companies (IOCs) as it expects these carriers to be the first to achieve the "triple play" and provide voice, video, and Internet services to consumers over their existing telephone lines.

As DSLAMs go, Allied Telesyn's new products do all the stuff you'd expect a DSL platform to do in the way of providing telephone service and high-speed Internet access. The 7700 is a 17-slot, nine-rack-unit (RU) central office chassis designed to support from eight to 272 subscribers. The 7400 DSLAM is a seven-slot, three-RU remote terminal chassis that supports from eight to 112 subscribers.

But these DSLAMs also go a step further to complete the "triple play" by providing video over ADSL with the ability to support up to 512 video channels. The quality of service of the video is ensured via 802.1p -- a protocol that gives Layer 2 switches (and IP DSLAMs) the ability to, among other things, make sure video packets are prioritized properly as they come through the network. "[Layer 2 switches] have all kinds of fancy QOS algorithms built in now that really mimic the hardcore ATM functions… but that also drive down the price tremendously," says Phil Jopa, Allied Telesyn's chief technology officer.

Like other IP DSLAMs, Allied Telesyn's gear offers video in a way that's less expensive than what's accomplished on ATM-based DSLAMs. Namely, the guts of an IP DSLAM closely resemble a standard Ethernet Layer 2 switch -- the components are inexpensive and plentiful. Also, the process of serving video streams to the end customer is more efficient because, rather than having to use one ATM PVC [permanent virtual circuit] per customer or move to SVCs [switched virtual circuits] to switch channels, the IP boxes make use of IGMP, or Internet Group Management Protocol.

In fact, the company has added a little kick to IGMP. If you're watching a video programming feed that's been delivered over DSL, when you change the channel the DSLAM uses "IGMP snooping" to see if there are any messages coming from the members of a multicast group (the customers it serves). When you click the remote, it passes along your request to the router or Layer 3 switch upstream in the network.

Such "snooping" effects can cause problems for routers, which need to process all the extra chatter. Allied Telesyn's box monitors these IGMP messages before they go upstream so as to save the router from being bombarded by useless or redundant information. So if 50 people being served by a DSLAM all change the channel to CNN at 8 PM, the Allied Telesyn DSLAM will only send one request -- not all 50 -- to the router further up the network. "We're just taking the standard and enhancing it," says Jopa.

The company's new gear competes with other IP DSLAMs sold by companies such as Lucent Technologies Inc. (NYSE: LU), Net to Net Technologies Inc., Paradyne Networks Inc. (Nasdaq: PDYN), UTStarcom Inc. (Nasdaq: UTSI), and Zyxel. Access equipment leader Alcatel SA (NYSE: ALA; Paris: CGEP:PA) and Advanced Fibre Communications Inc. (AFC) (Nasdaq: AFCI) , whose customers are mostly those smaller incumbent phone companies that Allied Telesyn is targeting in the U.S., also pose a constant competitive threat.

Separately, Allied Telesyn announced it has deployed the boxes with a consortium of IOCs in Wisconsin and with the Matanuska Telephone Association, a communications cooperative in Palmer, Alaska. Outside the U.S., the DSLAMs are in trials with NTT and Yahoo BB.

Allied Telesyn, a subsidiary of Japan's Allied Telesis K.K., has made its reputation outside the U.S. About 420 of the company's 2,540 employees are in North America, according to Howard Kamerer, Allied Telesyn's chief operating officer. The privately held company says it brought in $514 million in revenues last year and expects about $634 million this year, nearly 70 percent of which will come from sales to carriers in Asia.

Though its new DSLAMs make for interesting comparisons to ATM-based products, the target market is clearly the IOCs.

"The RBOCs... because of the FCC regulation regarding fiber-to-the-home, are going to be certainly more focused on their fiber-to-the-home deployments and metro Ethernet platforms than they are on ADSL," says Kamerer. RBOCs would have to count new IP DSLAMs as unbundled network elements and share them with competitors, he says, a deterrent that will likely keep IP DSLAMs out of RBOC networks until around 2005. Likewise, Kamerer adds that IOCs haven't invested nearly as much in ATM-based networks, so moving to IP DSLAMs isn't as big a deal for them.

— Phil Harvey, Senior Editor, Light Reading

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rbkoontz
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rbkoontz,
User Rank: Light Beer
12/4/2012 | 11:51:56 PM
re: Allied Telesyn Debuts DSLAM Drama
Phil,

This entire industry is becoming a very, very bad joke. Someday soon we will say, "remember back in 2002-03 when too many idiot investors poured hundreds of millions into telecom access gear development? Why didn't they learn from the optical core market disaster 2 years prior?" I am personally planning my exit from this space as it implodes in the next 12 months.

Some data points to consider:

There are no less than 25 vendors targeting the US access space now. Who are these idiots that think this is a good place to invest with money to be made?

RBOCs control 85% of the US market - 90% of which is locked up with Alcatel in exclusive contracts.

Every new startup says "we will start selling in the IOCs". What they fail to recognize is the IOCs represent a total market less than $100M - which cannot even sustain a SINGLE equipment vendor.

Being an enterprise-oriented company, this Allied Telesyn group has no business trying to make it in carrier access.
cyber_techy
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cyber_techy,
User Rank: Light Beer
12/4/2012 | 11:51:50 PM
re: Allied Telesyn Debuts DSLAM Drama
As long as there are jobs in the US. (at the expense of japanese stupid investors), good for the US.
pogiest1
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pogiest1,
User Rank: Light Beer
12/4/2012 | 11:51:44 PM
re: Allied Telesyn Debuts DSLAM Drama
ATI develops cheap products using cheap components and cheap labor. Its going to be a long a time before they can even dream about penetrating the carrier space. This was a waste of editorial time...
newt
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newt,
User Rank: Light Beer
12/4/2012 | 11:51:37 PM
re: Allied Telesyn Debuts DSLAM Drama
seems to me that 1500 IOCs represent more than a $100M market
ATI COO
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ATI COO,
User Rank: Light Beer
12/4/2012 | 11:44:03 PM
re: Allied Telesyn Debuts DSLAM Drama
Just to get a few facts straight, I'd like to spend a minute and elaborate on some of the comments that I have read. There were two major themes that came out on this series of message post. One was on the size of the market in the IOC space and the other was sentiments that were expressed about Allied Telesyn's ability to transform itself to capture its fair share of that market place. There are 1500 IOCs in North America. Last month, Allied Telesyn won three carriers in North America. Those three customers account for almost $8 million dollars in revenue. Over the next 18 months, every IOC in North America will look at the possibilities of delivering the Triple Play over their copper infrastructure. The market is estimated at $4.5 billion dollars. In today's economy, that is no joke. As far as Allied Telesyn's ability to transform itself, the company has replaced almost 70% of its head count in North America over the past 12 months, has purchased two companies and has started two major development centers that are now delivering products into the market place. All good companies, when the opportunity avails itself, transforms. Allied Telesyn has made that transformation. Over 50% of Allied Telesyn's revenue comes from direct sales engagements and 25% of its overall revenue comes from the service provider space. That is no joke. While everyone in the industry is laying people off, we've grown our systems engineering organization by 450% since 2001. Certainly the shareholders, as Allied Telesyn has reported its revenue growth, don't view it as a joke. It is serious business.
js2003
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js2003,
User Rank: Light Beer
12/4/2012 | 11:35:29 PM
re: Allied Telesyn Debuts DSLAM Drama

There is nothing wrong with inexpensive product.More power to ATI if they can make it work with low cost. ATI have same rich feature set as any other vendor out there. ATI does'nt have layers of expenses like other vendors.
F.Y.I: In regards to your comments about components, ATI uses the same chip set as Cisco.
jamesbond
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jamesbond,
User Rank: Light Beer
12/4/2012 | 11:35:28 PM
re: Allied Telesyn Debuts DSLAM Drama
.Y.I: In regards to your comments about components, ATI uses the same chip set as Cisco

--------------------------------

What chipset is that? PMC-Sierra?
etherhead
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etherhead,
User Rank: Light Beer
12/4/2012 | 11:14:08 PM
re: Allied Telesyn Debuts DSLAM Drama
With off base facts like that, I wish you would stay at whatever competitor of mine you are with - you make my job easier.
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