Alcatel SA (NYSE: ALA; Paris: CGEP:PA) said Wednesday that it has renewed a four-year agreement to provide DSL gear to Bell Canada (NYSE/Toronto: BCE). The $400 million deal will include deployment of Alcatel's DSLAM, the 7300 Advanced Services Access Manager.

DSL equipment sales continue to be a bright spot for Alcatel, which lost $4.2 billion in 2001 and has cut thousands of jobs in recent months. Its Bell Canada deal shows that, though service providers the world over are slowing their investments in new networks, they recognize it's still worth their money to satisfy the demand for broadband.

Alcatel says that Bell Canada will be able to reach up to 85 percent of its customers in Canada by year's end. Bell Canada says it had 591,000 DSL subscribers at the end of 2001, a 124 percent increase over the previous year. The carrier added more than 130,000 of those high-speed users in the fourth quarter.

Jim White, VP of marketing for Alcatel's broadband networking division, says fierce competition from cable operators helps contribute to DSL's success outside of the U.S. Another big factor he points to is that non-U.S. incumbent operators don't have to be so nurturing to their wireline competitors (see Tauzin-Dingell Takes Another Step).

"Regulators [outside the U.S.] don't require incumbent providers and their competitors to offer competing services over the same copper pair," he says. "The incumbents are more likely to invest in building out DSL networks when they know they're not going to lose control of those networks."

Alcatel held a 41 percent share of the global DSL equipment market in 2001, according to new data from RHK Inc. Next in line were Siemens AG (NYSE: SI; Frankfurt: SIE) and Lucent Technologies Inc. (NYSE: LU) with 13 percent and 10 percent, respectively. (RHK defines the category as any network systems that support the major types of high-speed data over copper lines, including ADSL, SHDSL, and VDSL.) In that same report, RHK points out that 66 percent of the DSL ports shipped last year went to Europe and Asia (see RHK Looks at DSL).

"[Bell Canada] is the only provider delivering coverage for broadband over copper in their whole marketplace," says White. "They've invested heavily in their network, and they've been able to accomplish something that hasn't been accomplished in the U.S.: They're making DSL available to a high percentage of people."

— Phil Harvey, Senior Editor, Light Reading
http://www.lightreading.com