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November 6, 2003
Swedish startup PacketFront AB is taking its Ethernet-based broadband access products to North America, where it says it's got a plan to help carriers earn more revenues in the market for triple-play (voice, video, and data) services.
Next week the company will announce its first North American customer, Columbia Mountain Open Network (CMON), an IOC (independent operating company) in British Columbia.
It’s a bold move, considering the North American Ethernet access market is packed with competition -- from giants such as Cisco Systems Inc. (Nasdaq: CSCO) to startups like Hatteras Networks. (See Who Makes What: Ethernet Access Equipment.) And the IOC market, where PacketFront looks to be focusing first, is packed with even more players (see Triple Play Promise at IOCs and Video Over IP).
PacketFront CEO Martin Thunman says that CMON will build a broadband network that reaches 75,000 subscribers. He says the key to PacketFront’s product line is a software provisioning system called BECs that allows carriers to deliver several services over the same access line, be it fiber or copper. BECs presents a services portal to users, enabling them to select, buy, and activate services without any intervention from the carrier.
PacketFront sells several pieces of equipment, including Ethernet switches and routers, customer-premises DSL and Ethernet access devices, and even a DSLAM, though Thunman says, "If you don't want to buy the whole system we won't sell you a DSLAM."
Originally, PacketFront focused on Ethernet broadband, growing out of Sweden’s Bredbandsbolaget AB (B2), an operator that pioneered Ethernet-to-the-home services in Sweden. Thunman orginally worked at Cisco, which was an equipment provider to B2. He left Cisco to start PacketFront, where he says the company focused on a provisioning system that could deliver more features than were available in the point products. In June, the company added to its Ethernet access story by adding support for DSL technologies (see PacketFront Sings New DSL Tune and PacketFront Launches VDSL Products). The company had originally shunned the technology because it couldn’t get high enough speeds -- which is to say, more than 25 Mbit/s -- to deliver true broadband services (see Cisco Intros VDSL Switch).
”With one broadband Internet service at $40 per month, all it takes is one call to the call center to wipe out your profit for the whole month,” says Thunman. He claims that a triple-play network based on PacketFront technology can help generate an average of $300 in monthly services revenue for the carrier.
”You can’t depend on plain-vanilla Internet access,” he says. “You have to go for triple play.”
The catch? First of all, triple-play services, while popular in places like Asia where brand-new Ethernet infrastructure is more common, have been much slower to pan out in North American, where aging copper plants are the rule and the distances from the central office to the access points is often too far to provide high-speed connections. Critics may point out that such a business plan would work well on clean, all-fiber networks or even VDSL, but things might get a little dicey on ADSL.
”You can do triple play over ADSL, but the big question is reach,” says Scott Clavenna, Chief Analyst for Heavy Reading (Heavy Reading is Light Reading Inc.’s paid research division). “The other issue is sustaining predictable performance when there is crosstalk and noise in the copper links.”
How does PacketFront plan to strike it rich in North America? It wants to start small -- CMON isn’t exactly Verizon Communications Inc. (NYSE: VZ). CEO Thunman says it's part of PacketFront's conservative, slow growth approach, predicated on the ability to help service providers deliver new revenues.
"We grow with the customer," he says, "Not before the customer."
— R. Scott Raynovich, US Editor, Light Reading
For more information, consult our Webinar Archive, which includes presentations on access technologies, including IP Video and Ethernet access.
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