If you’re a casual observer of the DSL market – heck, even if you’re a bit of an insider – you might not realize that very high-speed DSL (VDSL) is growing like wildfire (something we know about firsthand, having been sent running by the recent events in Southern California). VDSL is not everywhere – a nice way of saying it’s not happening in the U.S. yet – but in certain markets, VDSL is reaching or about to reach millions of customers, offering fiber-like speeds over the existing copper infrastructure.
Now, we know you’re thinking: Haven’t we been hearing about VDSL being the “next big thing” for years? What’s different now? The short answer is standards. After the VDSL Olympics earlier this year, the T1.E1.4 Working Group and the IEEE 802.3ah Ethernet in the First Mile (EFM) Task Force chose DMT over the competing QAM line code as their standard for VDSL deployments. While the ITU-T hasn’t yet reached a decision, the EFM and T1.E1 decisions seem to provide enough consensus for telcos around the world to move forward with their VDSL deployments.
The biggest adoption of VDSL has taken place in Asia, with Korea and Japan leading the way. In both of these countries, where DSL deployments have been incredibly successful, we’ve seen an ongoing “speed war” between competitors. Even basic asynchronous DSL (ADSL) services offer speeds - often 10M bit/sec or higher - that make North American 1.5M bit/sec DSL look paltry by comparison.
In Korea, VDSL deployments are already underway, with 10M and 20M bit/sec service deployments in place. Since the EFM and T1.E1 decisions, vendors we’ve spoken with tell us they are seeing large orders for DMT-based equipment, which, they say, is replacing QAM equipment in major urban deployments such as Busan and Seoul. KT is offering customers 50M bit/sec downstream/11M bit/sec upstream VDSL for not much more than their existing ADSL services, and Hanaro (KT’s biggest competitor) is also moving into VDSL deployments.
In Japan, similar deployments are being pursued by NTT and KDDI. NTT offers 50M bit/sec downstream/ 30M bit/sec upstream services, and KDDI outdoes that by offering a 70M/30M bit/sec service. NTT charges a premium of only $2 per month over its ADSL pricing for this high-bandwidth service.
In particular, NTT is using VDSL to make progress on its long-promised fiber to the premises (FTTP) deployments. Several years ago, NTT announced plans to deploy fiber to millions of apartment buildings throughout the country. Only a small number of these fiber deployments have been completed, but since the establishment of a VDSL standard over a half-million customers have been “lit up” using VDSL as a fiber-to-the-neighborhood/curb extension.
With prices for VDSL this low, and a market already primed for high-speed services, VDSL is starting to become a volume service. One vendor, Ikanos Communications, recently announced that it has shipped more than a million ports, about 90% to the Asian market.
But Asia is not the only region moving forward with VDSL. Ikanos, for example, is supplying VDSL chipsets to Marconi and Nokia (as well as some yet-to-be-announced “major” vendors) for the European market, and has seen interest in VDSL from a host of major European PTTs. There are still some issues of different band plans in different regions. For example, in Japan, VDSL must allow Japanese ISDN, which uses spectrum up to 640 KHz. Ikanos’ solution to this – which helps it and its vendors simplify inventory and manufacturing – is to use its Integrated Front End, which allows changes in bandwidth and throughput on the fly using the vendor’s network management system.
What does all this mean for North American service providers? First of all, they're behind the rest of the world – but this isn’t always a bad thing. As volumes rise elsewhere, VDSL component pricing is rapidly declining and approaching that of ADSL. While North American geographies and demographics don’t make VDSL deployments as easy they are in Asia (think spread-out suburbs instead of concentrated urban high-rise buildings), VDSL can still be a good fit for service providers looking to expand their fiber networks.
NTT’s example of VDSL extensions to fiber-to-the-curb deployments - with 500,000 customers and growing rapidly - can provide an excellent example for North American regional Bell operating companies starting down the road to fiber. While a true FTTP deployment, of course, offers greater bandwidth and fiber all the way to the home or office, VDSL may offer a cheaper alternative for neighborhoods and towns not on the initial FTTP deployment list. With 70M bit/sec being deployed today with off-the-shelf equipment, VDSL can offer telcos a means of competing with cable during the “interim” period it takes them to fully deploy fiber in their networks.
VDSL also has a play in the enterprise services marketplace as well, providing a relatively inexpensive means of providing high speed (DS-3 and above) last-mile services to business locations not lit up by fiber.
This time, North American telcos may be the ones to reap the benefits of another region’s volume production and lowered pricing – just as Asian telcos did with ADSL initially.