Broadband Services in Europe: ADSL or Cable?

Valerie Thompson

Europe's businesses will have to wait six months to a year until carriers can offer high-speed Internet access over Asymmetric Digital Subscriber Line (ADSL). That's the indication of a poll conducted by BYTE and backed by market researchers at Analysis (Cambridge, U.K.). Although ADSL is seen as an excellent access technology to broadband services, European carriers are not offering the new services yet. The carriers closest to a commercial launch are Telia (Sweden), BT (U.K.), Tele Denmark, and Telecom Finland.

The telcos' slow response to the broadband market means that an opportunity is opening up for cable service providers. The development is similar to what happened with Internet service providers (ISPs) when the Internet began to experience explosive growth. Says Paul Knott, author of a study (published by Analysis) on broadband technologies and their implications, "T elecommunications operators' local access monopoly will no longer exist in a market where cable, satellite, and terrestrial TV broadcasters provide alternative distribution mechanisms."

Cable operators across Europe, especially in Northern Europe, Switzerland, Netherlands, Belgium, France, and Austria, are already offering commercial services such as fast access to the Internet. However, they are currently concentrating on the residential subscriber market.

There are several reasons for the slow uptake of ADSL in Europe. BT has completed its ADSL trials but has no immediate plans to offer such services. The carrier is experiencing very high growth in its ISDN Basic Rate services, a spokesperson notes. Deutsche Telekom officials say that with one of the highest ISDN installed bases in the worl d, they don't feel an immediate need to rush into offering a high-speed service.

On the other hand, confusion about xDSL standards, marketing strategies, and positioning is slowing things down. Telia, for example, was about to launch ADSL-based interactive services on a commercial basis earlier this year but now says it has decided to put this off until it has completed further trials. The reason for the slowdown is that Telia's research group is debating the use of Very High-Speed Digital Subscriber Line (VDSL) technology instead of ADSL.

Much of the hardware required for a coherent ADSL service strategy is still not commercially available. However, some new developments from ATML (Cambridge, U.K.) and Orckit Communications (Tel Aviv, Israel) could change this situation in the near future. ATML launched a family of new communication chips earlier this year. Called Hydrogen (available now) and Helium (to be released by the end of 1997), these RISC-based processors handle asynchronous transfer mode (ATM) over xDSL very efficiently and are expected to significantly reduce cost and time to market for ADSL equipment suppliers developing modems, multiplexers, and network adapters.

Orckit's new ADSL-over-ISDN modem could be an opportunity for the large installed base of ISDN business users in Europe to increase bandwidth. Orckit's passive ISDN splitter enables parallel and transparent transmission of both ADSL and ISDN over twisted- pair telephone lines. Says Dan Arazi, Orckit's executive VP of marketing and sales, "ADSL over ISDN offers telcos a new option to enhance their subscriber services without undermining ISDN services already in place."

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Interactive Service Revenues in Europe

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In the near term, broadband services in Europe will be dominated by cable operators.