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November 21, 2006

ABI: North American Multi-dwelling Units Good Market for DSL Broadband from Telcos

Telcos looking for the ideal markets for offering DSL-based broadband should keep at least one eye peeled on multi-dwelling units (MDUs) in large North American cities.
That’s the conclusion ABI Research (News - Alert) reached in its latest look at DSL broadband services.
It’s true, the research firm ackwnowledges, that in densely-populated European and Asian cities, fiber and DSL networks have been in place for a while.
“But North America, with its sprawling suburbs and rural regions, has so far seen less interest in triple-play broadband MDU solutions,” ABI said in its report.
ABI defines MDUs as “apartment buildings and other large residential blocks.” These markets are starting to see the introduction of more DSL-based broadband offerings.
Companies like Verizon (News - Alert), for example—with coverage areas including New York, Boston, and Washington, D.C.—see that video services requiring combo fiber/VDSL2 networks are appealing to affluent urban customers.
ABI analyst Michael Arden noted in a statement that VDSL2 is a good way to deliver voice, video and high-speed data services over short runs of copper wire.
“Delivering services to the basement of a large building via fiber, and then on to individual dwellings over short lengths of copper, creates a huge potential,” Arden said.
Using this type of deployment, Arden added, telcos could make significant inroads into markets dominated by cable operators.
Globally, ABI estimates that the DSL market is worth $3 billion. Opportunities to deploy DSL services to MDUs are not only of interest to telcos and operators, but to equipment vendors as well.
Arden noted that, although in the past many of the companies that supply equipment to Regional Bell Operating Companies were North American-based—businesses like Lucent and Nortel—now competition is creeping in from European and Asian vendors such as Hitachi, Alcatel and Siemens (News - Alert).
North American vendors would due well to keep a close eye on their competition, ABI warned, because the European and Asian companies both have more experience with the MDU market, and already have a hold on significant volumes from overseas markets.
As a result, “they are able to offer North American telcos a range of products that are competitive on price as well as quality,” ABI noted in its report.
So what’s a North American telco or vendor got to do to compete? Arden said that, to be successful, fiber/VDSL2 systems must be scalable.

“Every MDU is different in size and construction, so a solution that can use whatever kind of fiber and copper is already in place is a key requirement,” Arden noted in the report.

Mae Kowalke previously wrote for Cleveland Magazine in Ohio and The Burlington Free Press in Vermont. To see more of her articles, please visit Mae Kowalke’s columnist page. Also check out her Wireless Mobility blog.


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