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May 16, 2013

No Last Rites for DSL, Say Chipset Vendors

By Joan Engebretson, Contributing Editor

An executive from a broadband equipment manufacturer told me three or four years ago that companies like his were not making any further investment in DSL technology development. Instead, he said, attention was focused fully on fiber-to-the-premises.



But things have changed a lot since then, as evidenced by two recent announcements involving new DSL components. Within the last month, both Ikanos (News - Alert) and Lantiq announced new VDSL chipsets.

So what changed?

Part of it is financial, as Lee Ratliff, senior analyst at IHS iSuppli noted on a conference call with press and analysts this week to announce the new Lantiq (News - Alert) offering. Not long after I had my conversation with the manufacturer who was so bearish on DSL, the financial market started getting concerned about the stability of the broadband business and started looking for a faster return on any investment in broadband.

When it comes to ROI, Ratliff said, the money guys are “looking for three years or less now.” That can be a difficult target to meet with FTTP. But it’s somewhat easier with DSL, Ratliff said.

(Ratliff didn’t get into detail about why the financial industry got so concerned about broadband returns, but it likely was related to uncertainty about the Universal Service program that traditionally has helped cover some of the costs of bringing broadband to areas that are expensive to serve.)

The other thing that changed over the last three or four years was on the technology side. Apparently not all manufacturers were quite as bearish as the fellow I referenced earlier because some of them continued to tinker with bonding (which combines multiple pairs of copper phone wiring to increase bandwidth) and vectoring (which boosts the bandwidth that copper can carry by canceling out signal noise).

According to Ikanos, its new vectoring VDSL chipset can support speeds of 110 Mbps over a distance of 500 meters or 200 Mbps and above when bonding is used. Lantiq claims 200 Mbps over distances of 300 to 400 meters using bonding or 150 Mbps over loops of no more than 200 meters using vectoring. Lantiq’s vectoring option is aimed at fiber-fed multi-dwelling units or other applications with short loop lengths.

One could argue, of course, that FTTP is a more future-proof approach to broadband deployment. The problem is that there are still a lot of places where service providers can’t justify the investment required to deploy FTTP.

What we’re seeing is that FTTP has already been deployed to areas where a quick profit could be made.

The proverbial low-hanging fruit has been picked and what we’re left with are many areas where FTTP economics and the realities of today’s financial markets don’t align.

In this environment, I would expect to see carriers taking a close look at products based on the new VDSL chipsets, which according to Lantiq should be on the market in the second half of the year.




Edited by Stefania Viscusi
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