Insatiable Bandwidth Demand

Europe's telcos are starting to seriously market ADSL services.

Bruce Page

For asymmetric digital subscriber line (ADSL) communications, CeBIT 98 marks more of a marketing watershed than a technological one. With Europe's national markets for voice telephony now op en to competition, alternative carriers are beginning to enter the field. They not only come from the telecommunications arena but also include cable TV and direct-broadcast satellite vendors that are eager to enter the data-communications market.

Offering data rates between 10 and 100 times faster than the theoretical limit of today's fastest 56-Kb analog modems, ADSL is ideally suited to solving the bandwidth bottleneck that throttles telcos' ability to satisfy the ever-growing demand for speedy data connections. This broadband data-access technique provides 8.192 Mbps of downstream capacity to subscribers, along with a 640-Kbps upstream channel.

Most important, ADSL can run over the existing copper pairs that wire together the world's 800 million telephones. ADSL modems multiplex voice and data together for the path to the telco's switching office, where voice is channeled through the traditional switching network, and the data is split onto a high-speed ATM infras tructure.

This year's challenge will be whether telcos can install ADSL lines cost-effectively and whether they can market their ADSL-based services successfully to subscribers -- an effort that will find its first major public appearance at the show. Deutsche Telekom will be launching a new ADSL service at CeBIT, its home turf, while other European telcos, including BT, France Telecom, PTT Telecom Netherlands, Telecom Italia, and Sweden's Telia, will also be hawking their ADSL offerings.

In addition, CeBIT 98 will see the first appearance of production ADSL digital modems for subscribers. The principal suppliers of subscriber gear, such as 3Com and Alcatel, are now entering volume production. This permits 3Com, for example, to propose its Cobra-DSL, an internal ADSL modem, for less than $400 list price.

Still, in 1998 the telcos will take the lead in marketing ADSL, with modems bundled as part of a data-access service package. Dan Arazi, executive VP of Israel-based Orckit Communications, suggest s that in the future ADSL modems will be sold off the shelf, much as analog and ISDN modems are sold today.

Will 1998 be the year of ADSL? Not likely, thinks Tim Hills of Researcher Analysys (Cambridge, U.K.), which forecasts that some 200,000 lines of ADSL will be installed worldwide by the end of the year, with real market growth beginning in 2001. "In Europe, operators will have their sights set this year on retaining market share in their core voice-telephony markets," he adds. Nonetheless, he sees ADSL as a "must-have" service offering in the coming years.

At a Glance:

In the future, ADSL modems will be sold off the shelf, much as analog modems are today.

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The Status of the ADSL Market

The Status of the ADSL Market
	Market status and development	Installed ADSL lines worldwide (cumulative)
1997	* A small number of localized commercial services exist. *Customers are early experimental adopters, especially high-end residential users and campus-type organizations.	A few tens of thousands, mainly in trials and pilot services.
1998	* Some major network operators worldwide begin wider (but still regionally or locally limited) deployment of commercial services. *Corporate business customers begin serious evaluation of ADSL for remote LAN access, telecommuting, and so on. *Some small office/home office (SOHO) and more high-end residential users begin to adopt ADSL.	200,000
1999	* ADSL is recognized as a definite new service, and much wider deployment by a greater number of network operators begins. *Corporate and business customers treat ADSL as a serious option and begin to incorporate it formally into their networks. *A significant take-up by SOHO, high-end residential, and teleco mmuter users begins.	1 million
2000	* ADSL becomes a mainstream service, with national availability for business (corporate and SOHO) and leading residential users. *A potential residential mass-market take-up is ready to begin.	3.5 million
2001	* A rapid take-up among business users (corporate, SOHO, and other small- and medium-size enterprises) begins as ADSL starts to replace ISDN for some data-access applications and spreads to large numbers of non-ISDN users. *The residential mass market begins, but growth is limited by competing technologies.	7 million
2002	* Growth continues in the business and residential mass markets; the latter dominates.	15 million
Source: Analysys