by Geof Wheelwright
Canada is fast-becoming a global pioneer in the rollout of ADSL (asynchronous
digital subscriber line) technology that allows high-speed Internet access
over standard phone lines.
In mid-November in Saskatchewan, primary carrier SaskTel began offering
an ADSL-based high-speed Internet access service known as Sympatico High
Speed. It uses Westell's implementation of ADSL and promises users Internet
access speeds of up to 7 Mbps. It is being hailed as the first time that
such a service has been offered commercially (outside of technology trials)
in North America by a primary telecommunications company.
SaskTel says that although the introductory service offering is currently
available only to residential customers in the provinces two largest urban
centres, Regina and Saskatoon, the plan is to widen areas of availability
quickly.
Users of the service are charged a one-time $99 connection fee and $69.95
per month, and are being offered unlimited usage if they sign up for 12
months. Other than a 10-Base-T Ethernet card, users are not required to
buy additional hardware for their computer, as the subscription includes
software, an ADSL modem and dealer support.
Meanwhile, in December, ADSL modem maker Paradyne's spin-off company GlobeSpan
announced that its rate adaptive digital subscriber line (RADSL) chipset
was being used in Paradyne products to support what it says is the world's
first RADSL-based Internet service operating at up to 2.56 Mbps.
Ironically, as with the Westell-Sasktel announcement, one of the first fruits
of the GlobeSpan technology is also to provide Internet access to users
in a prairie province. The link is through Calgary-based Internet service
provider (ISP) CADVision, which announced plans to offer its 20,000 customers
RADSL service using Paradyne's HotWire 5100 equipment in December.
The estimated initial price of $70 for the CADVision connection and HotWire
modem seems to reflect the same kind of calculation about what the market
will bear as the SaskTel experience in offering low-cost, high-speed Internet
access.
According to an August report from Boston-based industry research organization
The Yankee Group, this is only the beginning of what it predicts will be
a major move toward ADSL as this "technology looking for a solution"
becomes the darling of those looking for low-cost ways to implement high-speed
Internet solutions.
"We believe residential customers will be attracted to an ADSL-based
service that delivers 1.5 Mbps or better downstream data rates for $30 to
$75 per month," predicts the Yankee Group. "The market will stratify,
with the small-office/home-office (SOHO), telecommuter and Internet addicts
adopting the services early. Integrated services digital network (ISDN)
will continue to play a major role in servicing customers who do not require
multi-megabit services."
Another longtime participant in the ADSL wars offers an even more optimistic
view of ADSL demand and rollout in the next few years. Garrick Case, who
was with Paradyne until shortly after its sale (and subsequent split into
two companies) to Texas Pacific Group for US$175 million midway through
1996, believes so strongly in ADSL that his first new job after leaving
Paradyne is with digital subscriber line (DSL) modem maker Performance Telecom.
Case's first launch as the marketing "point man" for Performance
Telecom was the mid-November rollout of the "Champion" modem,
a new 7 Mbps modem based on DSL technology that he says will sell for between
US$500 and US$1,000, based on volume.
"DSL will provide telcos with the trump card they need to compete effectively,
it is a cable modem killer," says Case. And he adds there will be fast
performance improvements in the technology in terms of both speed and reach.
With an announcement expected at press time of an 8 Mbps, rate-adaptive
model that will adapt the available data rate to the distance and line condition
of the local loop. If either of these is problematic, the modem will just
"shift down" to an effective rate. This might eventually sink
to around 2 Mbps, but it does mean that the local loop will be covered almost
100 percent of the time, as opposed to current solutions that Case says
offer only about 80 percent coverage.
He has also kept a close eye on recent predictions from research organizations
such as Dataquest, which is cited as predicting that there would be more
than 20 million ADSL and symmetric digital subscriber line (SDSL) modems
sold by 2001. Case suggests the potential market is massive-even if only
a tiny percentage of consumers use these modems.
"Another useful number is that there are 600 million phone lines in
the world today-and that is expected to grow to 800 million by the turn
of the century," says Case. "For every one percent of those 600
million copper phone lines that get DSL modems at both ends, that represents
$3 billion in equipment revenues (based on $500 per line)."
Case also says he expects with this volume of potential business, ADSL modem
prices will likely tumble over the next few years as economies of scale
are brought to bear. "I think you will have a nice customer segment
interested in DSL modems," he adds. "I would expect prices of
$200 to $250 per modem by the end of 1997."
To better tackle this potential market, Case's former employer, Paradyne,
has completely reorganized itself by creating an additional entity-the aforementioned
GlobeSpan Technologies Inc-as its developer of DSL technology, and a separate
technology licensing business.
The new corporate structure is supposed to enable GlobeSpan to proceed as
a key source of DSL technology while Paradyne continues to focus on development
of broadband and high-speed network access products.
Based in Middletown, N.J., GlobeSpan is headed by former general manager
of Paradyne's Advanced Transmission Technology Unit, Gabe Torok. As president
of the spin-off venture, Torok says he is very bullish on prospects for
technology licensing.
"We believe we're in an excellent market with an opportunity to enhance
an already solid and extremely important customer base," says Torok.
"Our technology is currently being implemented in worldwide trials
of DSL products that enable incredibly fast Internet access and exciting
new services like video-on-demand."
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