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Report: DSL Rules 'Triple Play' Market

Light Reading
News Analysis
Light Reading
2/11/2003
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IP-based video services are on the rise, but it's no thanks to optical technologies, according to a report from Multimedia Research Group Inc.

Nearly 80 percent of all video services worldwide are fueled by copper-based DSL (digital subscriber line) techniques, the report says. According to Bob Larribeau, MRG senior analyst, telcos worldwide are seizing on DSL as a way to get video in the loop with existing voice and data links to issue "triple play" services (voice, video, and data -- geddit?). The effort's paying off, apparently: "Independent telcos say video services have made deployment of broadband profitable."

How profitable? By 2008, revenues from IP broadband video systems and services will top $8 billion, up from $500 million this year, the firm predicts, while services alone will grow exponentially:

DSL gives carriers a way to get out triple-play offerings without waiting on the evolution of fiber or satellite services, Larribeau says. The use of VDSL (very high bit rate DSL) is particularly popular, accounting for about 60 percent of service deployments worldwide. ADSL (asymmetric DSL) accounts for 20 percent today, with fiber deployment contributing 20 percent, according to the report.

These figures aren't apt to change anytime soon, the firm says. VDSL can handle up to three video streams and support rates up to 20 Mbit/s. The improvement of compression techniques, such as MPEG 4, will extend the life of ADSL as well, starting next year, according to MRG. Telco sources tell the firm there's no immediate clamor for bandwidth above and beyond the levels these technologies provide.

So far, the growth of triple-play services based on DSL has featured a range of different types of operators worldwide -- chiefly independent telcos, small regional operators, and multiservice operators (MSOs). The regional Bells, tied up in regulatory matters, have "sat by," according to the report.

"We don't expect U.S. RBOCs to aggressively deploy these services through 2006," Larribeau says.

Other industry sources argue, however, that RBOCs may sort out their regulatory problems sooner than that, putting even more competition into the triple-play market, thanks to their extensive copper-based networks.

Does this spell doom for optical technologies in multimedia services? What about PON (passive optical networking)? What about Ethernet? When it comes to delivering IP video to home users, other means of transport are taking a backseat, Larribeau maintains.

But MRG's opinion is, again, countered by others who say the RBOCs will not only seek to compete in triple-play DSL services, but will seek to offer new kinds of services that combine voice and data with digital broadcast TV -- an approach that calls for optical bandwidth (see Digital TV M&A Heats Up). That could give some DSL deployments a run for the money.

— Mary Jander, Senior Editor, Light Reading

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stuartb
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stuartb,
User Rank: Light Beer
12/5/2012 | 12:39:57 AM
re: Report: DSL Rules 'Triple Play' Market
Mary, what MRG is saying is substantiated (not countered) in the article you reference at the end of this piece.?

The M&A activity is indicative of the growth this market is experiencing.

-Stu
jim_smith
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jim_smith,
User Rank: Light Beer
12/5/2012 | 12:39:52 AM
re: Report: DSL Rules 'Triple Play' Market
I think Mary is right. M&A doesn't make sense if the video-over-DSL market is that great. The problem is that video-over-DSL will not replace TV anytime soon and the real big market is showing video on the TV screen.

If you can find a way to send 50 channels of TV quality video over a REAL (not some piece of wire in the lab) copper loop then you will be rich... and I'm not talking about the nobel prize money...
stuartb
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stuartb,
User Rank: Light Beer
12/5/2012 | 12:39:45 AM
re: Report: DSL Rules 'Triple Play' Market
video-over-DSL will not replace TV anytime soon and the real big market is showing video on the TV screen."

Huh?? The video over DSL people like Next Level and iMagic are delivering digital TV over DSL. My point is that Mary thinks the two articles are talking about different things when, in fact, the "DSL triple play" and Digital TV are one and the same. The comapnies are being acquired because video over DSL (delivering "video on the TV screen" as you called it) is seeing some level of success. sheesh
jim_smith
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jim_smith,
User Rank: Light Beer
12/5/2012 | 12:39:43 AM
re: Report: DSL Rules 'Triple Play' Market
Huh?? The video over DSL people like Next Level and iMagic are delivering digital TV over DSL.

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OK. We were talking about different M&As. You are right, Moto/NLC and Alcatel/iMagic M&A seems supportive of a bullish future for video-over-DSL. I was refering to the M&A rumours of SBC/DirectTV. The article reads: "... but will seek to offer new kinds of services that combine voice and data with digital broadcast TV ...". That seems to indicate that video-over-satellite or video-over-cable is not going to be replaced by video-over-DSL. If at all, we will see video-over-fiber.

I think the problem is that you seem to think all DSLs are the same. They are not. Some DSLs run on the existing plant and others require a brand new fiber plant. Did you know that Next Level's video-over-DSL solution requires fiber to the curb? Do you know how much it costs to lay fiber to the curb?
LightMan
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LightMan,
User Rank: Light Beer
12/5/2012 | 12:39:43 AM
re: Report: DSL Rules 'Triple Play' Market
I guess this is why SBC yesterday was rumored to be exploring a DirecTV acquisition.
BobbyMax
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BobbyMax,
User Rank: Light Beer
12/5/2012 | 12:39:40 AM
re: Report: DSL Rules 'Triple Play' Market
Most of the voice, data and video services can be offered over DSL. These services need to be provisioned and managed by RBOCs. Without the participation of RBOCs, these services cannot be offered to every single home.
konafella
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konafella,
User Rank: Light Beer
12/5/2012 | 12:39:35 AM
re: Report: DSL Rules 'Triple Play' Market
Jim Smith, you clearly need to back down from this discussion until you are a little more well versed on the subject.

Video-over-DSL is real. Today. It can provide 120+ channels of quality digital television to your TV and this can be delivered over an existing ADSL line running as low as 4 or 5 Mb/s. It can support video on demand, personal video recorder, PPV, etc., likely even before some of the cable companies offer these new services. The method is via switched IP video (IGMPv2, to be specific), not broadcast like the cable companies. So you may be limited to viewing 2 channels at once in your house if your service is based on ADSL. VDSL limits will be far less restrictive.

Let me set you straight on another point. Video-over-DSL does not require fiber to YOUR curb. It may require fiber to your neighborhood (which incidentally, likely already exists to provide your telephone serevice via a DLC cabinet if you are in a subdivision built in the 70s, 80s or 90s). This is not unique to the telephone companies, as cablecos have had to build fiber to the neighborhoods to support HFC plants in order to provide more channels, cable modems, etc. And their business case to do that build in the 80s/90s was based on basic analog cable revenue alone (i.e. it didn't require a triple play to make the numbers work).

There are already telco curbside cabinets in most neighborhoods and they are sufficient to support ADSL video services, but an upgrade to VDSL will clearly require more of these cabinets in each neighborhood.

No more FUD, okay?

kb
jim_smith
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jim_smith,
User Rank: Light Beer
12/5/2012 | 12:39:16 AM
re: Report: DSL Rules 'Triple Play' Market
"Jim Smith, you clearly need to back down from this discussion until you are a little more well versed on the subject."

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Ha ha... if people started backing down because you think they weren't "well versed" as you put it, we wouldn't have a message board would we? Anyways, I will back down, but not because I think I am not well versed on the subject.

Thanks for the post though. I think it validates my position.

Just curious... what is the maximum length of the copper loop (in kft) that can support video-over-DSL?

And, if as you say, the technology is available and the fiber is there, etc., then what is holding back the ILECs? Geez they would give anything to increase revenues in this market! I'd like to know how you explain that... because they are the ones you need to convince, not me!

Bottom line, I don't think we should get carried away and paint a rosy future for video-over-DSL. We've had too much of that during the bubble.
jim_smith
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jim_smith,
User Rank: Light Beer
12/5/2012 | 12:39:12 AM
re: Report: DSL Rules 'Triple Play' Market
SBC to buy DirecTV for their video-over-DSL??? Hardly.

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Exactly my point. If video-over-DSL was so hot, why is SBC going after DirectTV's satellite assets, given the current regulatory scenario. If they wait a little longer, the FCC might hand them the market on a silver platter and they don't have to worry about buying DirectTV for a triple play!

The reason they are even considering buying DirectTV is BECAUSE they are not convinced about video-over-DSL. It's the same story with other ILECS.
Mr. Mutt
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Mr. Mutt,
User Rank: Light Beer
12/5/2012 | 12:39:12 AM
re: Report: DSL Rules 'Triple Play' Market
Let me ring in with a few opinions:

Video-over-DSL reach: Some companies are supporting an enhanced version of ADSL that will allow 16M down and 1M up to about 8Kft, then it falls off to regular ADSL rate/reach. There are also people that are supporting VDSL (13/13 and 22/3) that go out to about 5Kft then fall off at ADSL rates beyond that...good for buildings, neighborhoods with highspeed to the curb (PON, etc.)

SBC to buy DirecTV for their video-over-DSL??? Hardly. They'd be interested in their entrenched satellite base to push broadband over satellite. In case you all forgot, DirecTV shut down Telocity end of last year...

DSL isn't as "alive and well" as many think as well. Nokia DLCC just closed their doors in Petaluma, CA yesterday and are moving operations back to Finland as a cost savings move. 170 people let go yesterday with 100 more staying on to assist in the transition before they are let go. If DSL was kicking so much butt, why would Nokia make that move?

Clearly xDSL will predominately be for data services for the next few years. Realistically, you will see VoDSL before you see video-over-DSL as it requires less bandwidth to move voice than voice and video combined. Video will require a substantial upgrade to be able to support that much bandwidth per house. You're talking about at LEAST a gig per 15-20 houses on a given link. How many people are deploying GE that far out on the edge? Heck, metro RPR is still GE! With the CAPEX spending at the low levels it's at today, who's going to front the $$$ for this system to be deployed?
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