BellSouth: Access Will Rise Again

Provides guidance on high-speed access strategy, says it will stick to FTTC plans

December 7, 2004

3 Min Read
BellSouth: Access Will Rise Again

First Verizon Communications Inc. (NYSE: VZ). Then SBC Communications Inc. (NYSE: SBC). Now BellSouth Corp. (NYSE: BLS) has finally come forward with its next-generation access network plans. In an analyst briefing on Monday, the carrier offered an overview of its strategy for 2005 and layed out its plans to cover nearly 80 percent of the households in its network with high-speed Internet capabilities (see BellSouth Boasts DSL Growth, SBC Sheds Light on 'Lightspeed' and Verizon Flaunts Fiber Plan).

Company executives also crowed about the fact that it had passed more than 2 million DSL subscribers in November. BellSouth ended the third quarter of 2004 with almost 1.9 million DSL customers, representing an overall increase of 40.1 percent over the third quarter of 2003.

F. Duane Ackerman, chairman and CEO of BellSouth, said the company is determined to strike a balance between staying on the cutting edge with its strategic moves and continuing to deliver for investors. “Devices at the edge of the network are more and more going to an IP-based broadband network, which has disruptive effects for all players in this industry. There are challenges and opportunities in this environment and the company that can reposition its assets to fit this new realty can make a difference. BellSouth has done that.”

Ackerman said BellSouth will continue to focus on delivering superior customer service while evolving from a traditional phone-service provider to a broadband company offering high-speed communication services including voice, video, and wireless. BellSouth is in a prime position for growth in a region that has a prime influx of customers looking for high-speed access and other BellSouth services like wireless from Cingular Wireless, he said.

BellSouth’s chief staff officer Mark Feidler said at least 1 in 4 households (29 percent) in the carrier's territory will have broadband access this year. “We believe that wireline services are the most cost-effective way to meet customer needs,” he said. “Owning the last mile is key to delivering high-quality services.”

Other carriers are pursuing fiber to the premises (FTTP) and fiber to the node (FTTN) access strategies. But BellSouth has for several years been deploying fiber to the curb (FTTC) in new residential developments, since the majority of access facilities serving the mass market are still copper twisted pair in the last mile. So BellSouth believes it to be more sensible to use advanced video compression -- along with multi-pair bonding -- to be able to deliver the kind of bandwidth required for advanced video services and high-speed Internet.

Feidler says 46 percent of the 13.8 million homes served by BellSouth have fiber facilities loops that get within 5,000 feet of the customer’s home. “On loops under 5,000 feet, we believe we can provide up to 12 [Mbit/s] of data. We plan to start field testing a technology, ADSL2+, that we believe can provide 24 [Mbit/s] of data to the household.”

He says if the technology works as expected, BellSouth will ramp deployment in the second half of 2005, potentially reaching 3 million homes by year-end in its top 30 markets. He contends that the cost to implement the service would average $225 per home and that BellSouth can light a home with just $80 in incremental spending.

BellSouth execs stressed that they are keeping an eye on competition coming from cable companies and other RBOCs and plan to use service bundling to hold off competitors. The carrier sees its advantage in partnerships with DirecTV Broadband Inc. and Cingular. The executives say some video-related partnerships are being explored as well. Microsoft Corp. (Nasdaq: MSFT) was mentioned, and that's no surprise considering what SBC has already announced (see SBC Awards Microsoft $400M IPTV Deal ).

The company did not, however, give details as to what vendors it has picked for its IPTV request for proposal (see BellSouth Picks IPTV Finalists). Alcatel is reportedly favored to take the cake, but there's been no official acknowledgement from the carrier yet. — Chris Somerville, Senior Editor, NGS

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