Ericsson Forms Critical Partnership
Ericsson says there's growing demand for Ethernet-based access products that can help deliver TV and video services, and it's keen to compete with the likes of Alcatel (NYSE: ALA; Paris: CGEP:PA) for the lucrative contracts being awarded by carriers building next-generation access networks (see SBC Sheds Light on 'Lightspeed' and BellSouth Picks IPTV Finalists).
Peter Linder, technical director at Ericsson's wireline division, says carriers using Ericsson's central office IP DSLAM have specified a need to distribute TV services (see Ericsson Wins Matáv Access Deal, Ericsson Awarded Indian Contract, and TeliaSonera Plans Ethernet Over DSL). "It's the most important criterion. Carriers see TV services as a way to drive broadband uptake," says Linder.
But the Swedish vendor is missing a critical link in the chain. It already has FTTH technology, supporting a build-out of fiber all the way to the customer, and an IP DSLAM that sits in carriers' central offices and delivers services across the existing copper plant. But it lacks its own remote DSLAM that complements its all-Ethernet approach to broadband access.
Having such a product is becoming increasingly important as major carriers adopt fiber to the node (FTTN) or fiber to the curb (FTTC) strategies that still make use of the installed copper plant for the final connection to the customer.
"Critical Telecom has already developed a remote Ethernet DSLAM that complemented our approach, and we need to be hitting the market straight away," says Linder.
That swift time to market is critical, and Ericsson has already missed the longship on some big deals. Major rivals, such as Alcatel with its 7330 Intelligent Services Access Manager product with which it has wooed SBC Communications Inc. (NYSE: SBC); and Siemens Communications Group, with its Surpass hiX 5630 ADSL 2+ IP DSLAM, are already marketing their solutions to carriers keen to at least enable their next-generation broadband networks for entertainment services (see Alcatel Cancels New Litespan DLC).
But Ericsson feels it has found a nice niche. "Critical has specialized in outdoor characteristics you need for remote outside plant," says Linder. "It needs to be remotely powered and be waterproof."
Critical's Gemini product also conforms to Ericsson's Ethernet roadmap, as it supports a Gigabit Ethernet connection to the remote node and then an Ethernet ADSL2+ link from the node to the customer. And later it will support VDSL2, the yet-to-be-standardized Ethernet version of VDSL, says Linder.
"I don't think any carriers believe they can deliver video in any volume without a transition to Ethernet," says Linder, a view largely endorsed by speakers and delegates at last week's TVoverDSL 2005 event in Paris (see Competition Trumps Demand in Euro IPTV).
So is this a smart move by Ericsson? It certainly makes sense to Heavy Reading analyst at large Graham Beniston. "They're both singing off the same Ethernet hymn sheet, and it's hard to see who else Ericsson could have partnered with. It makes sense to do this -- you can't develop a product like this overnight." Last year's acquisition of Marconi Corp. plc's (Nasdaq: MRCIY; London: MONI) broadband assets by Advanced Fibre Communications Inc. (AFC) -- now part of Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA) – is another case in point (see ... And Helps Marconi Cut Its Debt).
But the new pairing will face tough competition from Alcatel, says Beniston, which can pair its 7330 remote DSLAM with its 7430 Ethernet aggregation switch.
Beniston notes that there are two main drivers for the deployment of such remote DSLAMs -- the bandwidth needed for IPTV services and the Federal Communications Commission (FCC) "deep fiber" ruling that gives carriers the same unbundling immunity for fiber delivered within 500 meters from the customer as they get for FTTH. Critical Telecom, naturally, was delighted at the ruling (see Critical Telecom Cheers FCC Ruling).
Critical's CEO Nancy Macartney, only days into her new job, says the Ericsson deal isn't exclusive, and that she's looking for further partnerships (see Critical Telecom Appoints CEO). She sees Ericsson as being particularly strong in Europe, and the relationship gives her company "credibility and access to Tier 1 carriers worldwide."
Macartney says Critical's Gemini products are in trials in North America, though she wouldn't say whether Canadian carrier Telus Corp. (NYSE: TU; Toronto: T), an existing customer for its FiberLink DSL extension product, is one of the test beds.
She adds that a VDSL2 version of Gemini will be available later this year once the technology is standardized, a process expected in the Spring or early Summer. Critical will supply its Gemini prodict to a Tier 1 European carrier for trials within the next four weeks.
— Ray Le Maistre, International News Editor, Light Reading