Suppliers of DSL equipment and ICs are betting on the telcos' ability to leverage very high speed DSL (vDSL) to further boost DSL market penetration.
By offering data rate of 52 Mbytes/sec, vDSL will allow telcos to offer viable television, voice, and data services to consumers, proponents say.
The trend was demonstrated this week when five of the leading DSL IC players said they had formed a consortium to ensure interoperability based on a discrete multi-tone (DMT) data transmission that is backward compatible with aDSL networks.
The consortium will help ensure that vDSL equipment, based on chipsets supplied by the consortium suppliers, will be interoperable as the large-scale rollout of vDSL networks slated for this year begins.
"vDSL is part of roadmap in the DSL revolution and vDSL will be the 'killer app'," said Giovanni Chiappano, director of the Public Networking Business Unit, Wireline Division of the Telecom, Peripherals, and Automotive Group of STMicroelectronics Ltd. in Agrate, Italy.
The rollout of vDSL should find a sweet spot in demand by the telcos that are looking to move beyond voice offerings.
Currently, with the telcos seeing flat revenue growth, they are now more eager than ever to add additional services to their voice mix, said John Chang, an analyst with Allied Business Intelligence Inc. in Oyster Bay, N.Y.
"While currently telco carriers have full penetration of POTS market, they need additional forms of revenue," Chang said. "Competing technologies [such as cable networks] are eating at the telephone revenue, so vDSL allows telcos to compete with cable companies in video and TV."
In addition to video and data capabilities, vDSL's voice transmission capability alone will further stimulate the DSL market, particularly for struggling CLECs.
According to Telechoice, voice-enabled DSL lines will grow from less than 100,000 in 2000 to 2 million by 2004. Silicon and system suppliers have also been developing voDSL for over four years. "While VoDSL has not taken off to the extent that many said it would a few years ago, it is being deployed and growing around the world," Chang said. "vDSL will also help make that happen."
The successful deployment of vDSL, however, is also contingent on interoperability, which is the raison d'etre of the committee, said STMicroelectronics' Chiappano. "But while a vDSL chipset may have adopted a particular standard, it does not means they are automatically interoperable with other chipsets from different suppliers that are based on the same standard, so further testing is required," he said.
The consortium could thus serve as a boon to vDSL, Chang said. "The fact that the key players in the DSL industry are working together for interoperability standardization is a big push for the vDSL industry," Chang said. "When interoperability between access concentrators such as Alcatel and chip-set vendors such as GlobespanVirata and STMicroelectronics takes place, telecom carriers will be willing to deploy vDSL at an accelerated pace."
Meanwhile, the standard based on DMT that the consortium members -- Alcatel, GlobespanVirata Inc., Ikanos Communications, and Zarlink Semiconductor -- have adopted also faces competition from the quadrature amplitude modulation (QAM) standard, which is advocated by Broadcom Corp. and Infineon.
"The issue of standardization for vDSL is still unclear," Chang said. While both sides claim the respective standard they back is more robust than the other, the DMT vDSL standard, however, offers backward compatibility.
"Concerning wide-scale deployment of high data rate and video delivery over copper pairs, backward compatibility of the DMT modulation with existing ADSL deployment is essential," said Leon Cloetens, vice president and general manager, wireline division at Alcatel Microelectronics in Paris.
Ultimately the market will determine whether DMT or QAT vDSL is adopted, Chiappano said. "In the end, it is not easy to say who will be the winner," he said. "The winner, however, should be determined by 2003."