Alcatel SA (NYSE: ALA; Paris: CGEP:PA) today announced a new addition to its family of DSLAMs. Called the 7301 Advanced Services Access Manager (ASAM), it's likely to be welcomed with open arms (and sighs of relief) by quite a few carriers.

Why? Because they're hoping the 7301 will help them unlock more revenues from existing Alcatel broadband infrastructure, which is already widely deployed.

"Up until now, Alcatel's DSLAMs have had a reputation for holding back the deployment of advanced services," says Graham Beniston, principal of Beniston Broadband Consulting and author of a report on the B-RAS (broadband remote access server) market in the current issue of Light Reading Insider, Light Reading's subscription research service.

By addressing this issue, the 7301 could give carriers the confidence to roll out higher-margin, DSL-based services to small and medium-sized enterprises and to move ahead with offering video-based services to residential customers.

Right now, a lot of service providers are holding back on this front, according to Beniston. "Carriers like BT are frightened to use more than one ATM PVC [permanent virtual circuit] per customer or move to SVCs [switched virtual circuits] because of poor support for these features in existing DSLAMs and ATM switches," he says.

"Even worse, carriers are frightened by the element and network management aspects of a million ATM PVCs. This holds things back, because the best way of providing advanced services over DSL links, is to use multiple ATM PVCs or SVCs per customer link."

Alcatel is by no means the first DSLAM vendor to announce a product addressing some of these concerns, but announcements are one thing and deployments are another in this market, according to Beniston. "Alcatel is late to announce, but it might still be first to deploy."

One reason for this is that a lot of carriers already have Alcatel DSLAMs and are probably reluctant to bring in another supplier because of the complications and cost of operating and maintaining two sets of equipment.

Alcatel has by far the largest share of the DSLAM market. At the end of 2002, it had shipped equipment equivalent to 23.5 million DSL lines, more than four times as much as its closest competitor, Lucent Technologies Inc. (NYSE: LU), which had shipped about five million lines, according to Dell'Oro Group. So, what will service providers get with the Alcatel 7301 ASAM that they aren't getting with the 7300, its flagship DSLAM? "It's a case of bigger, better," says Phil Tilley, VP of marketing for Alcatel's fixed network division.

Here are the key points:

What still appears to be missing in the 7301 is support for ATM switch virtual circuits, which will disappoint some carriers.

Alcatel expects to start volume shipments of the 7301 this summer, although some features won't be available until the third or fourth quarter of 2003, according to Jo Bervoets, VP of product marketing for the access business group of Alcatel's fixed networking division.

A late-arriving feature is likely to be a Gigabit Ethernet uplink -- something that Beniston doubts will be required by carriers in any case.

"What carriers ask for in RFPs and what they actually buy are two different things in the DSLAM market," says Beniston. He maintains that carriers nearly always end up skipping the bells and whistles and buying basic boxes at the lowest possible price.

Beniston goes on to say that Alcatel has achieved its market dominance by having the most aggressive DSLAM prices. He expects Alcatel to continue this policy with the 7301. Recent message board comments suggest this could be between $50 and $75 a port after discounts (see Price per Port).

It's worth noting that Alcatel is planning to announce a new version of its IP Services Module (ISM), which will add B-RAS functions to the 7301. The new version, ISM2, will be announced "later" according to Bervoets.

Previous research by Light Reading suggests that the ISM2 is being developed with the help of Corona Networks Inc., which is in turn tapping the expertise of India's Wipro Ltd. (see Corona Gets a Boost).

— Peter Heywood, Founding Editor, Light Reading