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

databoy12 12/5/2012 | 1:00:42 AM
re: BellSouth: Access Will Rise Again Don't ever count Lucent out. Lucent recently won a large deal with Cingular and might very well ride this win at BellSouth. ALA isn't necessarily known for its state of the art products, especially IP products. I think SBC chose ALA simply as a business decision and not a technology decision. ALA still has to prove to SBC that it can deliver reliable IP products. I am talking DSLAM's of course. I would look for other vendors to fill the router/networking role at BellSouth, and eventually, SBC. Players like Redback and Juniper fill this role rather nicely and might partner with ALA and Lucent for this business.

It will be very hard for ALA to prove its IP products in an environment like IPTV. This is a rather complex architecture and only the vendors with experience doing this will succeed. My two cents anyway.
jes 12/5/2012 | 1:00:42 AM
re: BellSouth: Access Will Rise Again
BellSouth intiative to build up their new next gen access network

Defanitely Alcatel is going to be the player to beat. If ALA wins this also ( Already have the Big SBC), it will be in the drivers seat for the next decade in the access area. It will further extend its lead.

Who will be in loosing side -- Tellabs/AFC I guess .

Comments ??
SuperChargeAccess 12/5/2012 | 1:00:41 AM
re: BellSouth: Access Will Rise Again I would bet it will be shared. Alcatel is FTTN, Tellabs/AFC is FTTC. They both have their place in the network. If you look at the Bellsouth Analyst Briefing .pdf file it says "FTTC will be utilized in greenfield deployments", but it also talked about 5000' loops evidently served by FTTN.

I believe the big question is what the ratio between the two is going to be in greenfield apps.
scrappy 12/5/2012 | 1:00:41 AM
re: BellSouth: Access Will Rise Again I was wondering what the impact on the Catena product will be with this new architecture. It appears that Ciena was counting on serious retrofit revenues of SLC5 systems with the Catena ADSL solution. Are the existing SLC5 systems typically 5000 feet or less to the customers, or will this require Bell South to rehab the network with new gear?
databoy12 12/5/2012 | 1:00:40 AM
re: BellSouth: Access Will Rise Again Scrappy,

I wouldn't bet on BSouth retrofitting SLC5's. I would think new equipment would be in order. Don't think Catena will get anything from this, but who knows????
OldPOTS 12/5/2012 | 1:00:28 AM
re: BellSouth: Access Will Rise Again
"Other carriers (SBC & VZ) are pursuing fiber to the premises (FTTP) and (SBC) fiber to the node (FTTN) access strategies. But BellSouth has for several years been deploying fiber to the curb (FTTC) in new residential developments."

Can someone please explain the difference between FTTN & FTTC, besides site/location? (Vendor?)

Looking closer at the latest SBC announcement, they will not only deliver IP-video over FTTP, but in the mean time will offer services over twisted pair ADSL (ADSL2+ and other xDSLs up to 24Mbps for video) to non green field sites.

Ethernet (initially pushed by BellSouth)is needed at the edge aggregation points of the networks to provide flexibility to separate high speed Internet access service from other services such as video delivery. Just go to vendor Webb sites and read about the products listed in the proposals to discover how. But this network delivery is not necessarily all ethernet as has been suggested. Other techniques and technology (ATMRules) may still be used in the core/backbone of the network, including existing equipment and circuits.

There are several new DSL techniques listed in these equipment descriptions that will provide ~24Mbps over substantial distances (>5000 ft), as compared to existing high speed DSL services. Then fiber connected remote DSLAMs (FTTN) can be used to extend ~15 miles from the CO/POP to service all the neighborhoods.

paolo.franzoi 12/5/2012 | 1:00:26 AM
re: BellSouth: Access Will Rise Again

FTTC = 500 feet
FTTN = 5,000 feet

ADSL2+ does not deliver 24 Mb/s in a binder group once there is about 3 lines active in the binder group. This is a well known issue and has been discussed in length at the DSL Forum. The DSL chip vendors publish results of a single modem in a binder group, and these do work. However, once a binder group is loaded one should expect more like 12 - 15 Mb/s out of ADSL2+.

All these effects become minimized at the 500 foot loops for FTTC.


paolo.franzoi 12/5/2012 | 1:00:25 AM
re: BellSouth: Access Will Rise Again

The SLC-5 retrofit cards have a T-1 IMA uplink. This is will not work for video, so basically the money spent on these cards is throw away at this point. Note, that Catena was doing $25M/quarter before acquisition and $15M/quarter after. This business is washed up.

Same thing can be said of most of the mini-DSLAMs (read Adtran).

BoardMonkey 12/5/2012 | 1:00:20 AM
re: BellSouth: Access Will Rise Again brookseven,

Actually, the T1/IMA backhaul is the old configuration. Catena's newer version is DS3 backhaul. As for the revenues pre- vs. post-acquisition, keep watching. You may be in for a surprise.
paolo.franzoi 12/5/2012 | 1:00:17 AM
re: BellSouth: Access Will Rise Again
DS3 is also insufficient. Call when they have a GigE.

From a Revenue standpoint, I am quoting public info from Ciena.

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