Future for VDSL
(Very-high speed DSL) will eventually emerge as a primary "last-mile"
broadband solution for both the home and business. The value
proposition for VDSL in both marketplaces is very attractive. VDSL
enables Telcos to offer broadband services that provide a quantum leap
in terms of access speed and applications available to the end user.
VDSL provides Telcos the technology to compete in the residential
market for bundled voice, data and video services using copper
infrastructure without having to install fiber-to-the-home. Likewise,
VDSL will provide a very low cost data transfer technology enabling
high-speed data networking, high quality video conferencing and
multiple voice lines for businesses over the existing copper
infrastructure. Although the capabilities of VDSL are revolutionary,
the industry has to overcome distance limitations and standards issues
before the technology will be viable as a mass-market solution.
VDSL is one
of the most promising technologies to emerge in the current
telecommunications market. Like other xDSL technologies (ADSL, SDSL and
G.lite), VDSL utilizes a single twisted copper pair to provide high
speed access. While other xDSL services are capable of up to 8 Mbps
download speed, VDSL facilitates transfer rates of up to 52 Mbps, which
is 1,000 times the capacity of today's dial-up lines. VDSL soon will be
cost competitive with other xDSL technologies.
transfer speeds enables Telco's to cost-effectively provide many
services that cannot be supported by other lower speed DSL solutions.
ADSL, SDSL and G.lite are limited to providing data access and a single
video channel for the residential market and primarily data access and
limited data networking for the small business market. Asymmetrical
VDSL allows Telco's to penetrate the residential market with multiple
video services, bundled with data access and telephony. Symmetrical
VDSL provides bundled data networking, video conferencing and voice
service for the business market.
provides more bandwidth than is required for most applications today,
its potential value as a broadband solution will not be realized for
several years. The growth of VDSL is dependent upon applications that
are still in their infancy. Many of these new value-added service
offerings for businesses will significantly drive the need for VDSL's
increased bandwidth. Voice-over-DSL/IP, Virtual Private Networks,
firewalls and other IP-based applications will be attractive to
business customers since they replace the functionality of more
traditional technologies, but at lower cost and more simple ease of
use. Similarly, developments in high-bandwidth video will make
videoconferencing and other video applications more accessible for
example that will drive VDSL acceptance is voice-over-DSL/IP, which is
already gaining small and medium sized business customers. Instead of
purchasing a costly T-1 connection, which includes 24 individual voice
channels, businesses can use VDSL to install voice-over-DSL, which will
support hundreds of voice lines simultaneously on a single copper pair
(compared to 24 for other xDSL offerings) while providing dedicated
bandwidth for data services. This type of capacity will be attractive
to companies that will expand call centers, set up informal call
centers or just reduce corporate telecom costs. Given the high prices
for substitute products, such as SDSL and T-1 lines, the potential
margins for VDSL in this application could initially be quite large.
Voice-over-DSL/IP is expected to gain traction in the market by 2002.
technology also will provide bandwidth to enable Telcos to leverage the
existing copper infrastructure to provide residential video services.
As the cable industry moves into bundling telephone and data services
with broadcast television, Telcos require a technology to enable them
to remain competitive in the residential market. VDSL is the only DSL
technology with enough bandwidth to support bundled digital broadcast
TV for multiple TVs, data services and POTS on a single copper line to
the home. VDSL also can allow Telcos to provide value-added video
services over VDSL, including video-on-demand, interactive TV and
VDSL offers the key to competing with cable offerings in the
residential market. Cable companies are beginning to focus on bundling
video, data and voice services over coaxial, thus completely bypassing
the Telco's infrastructure. To maintain a competitive position, ILECs
must enter into the video delivery business, countering with
video-over-VDSL. VDSL, with its high transmit speeds, is the only DSL
technology that allows ILECs to provide video services to multiple
televisions, while also offering telephony and data access services.
Although the margins on each line are not large (estimated annual
revenue per line of roughly $400), the potential market base is
immense, with nearly 100 million potential residences. By 2002,
Cahner's in-Stat predicts that over 500,000 homes will use
video-over-VDSL services growing to over 7 million by 2005.
the potential VDSL currently exhibits, the technology must overcome
three major potential obstacles to adoption: the establishment of
standards; "last-mile" distance limitations; and provisioning.
there are two camps within the VDSL industry advocating two different
standards, QAM and DMT. Until standards are established, it is unlikely
that carriers will invest significantly on large-scale VDSL
- Distance limitation is another major obstacle
for VDSL, as the technology is only effective over 4,000 feet of copper
wire from the CO (other DSL solutions can function at up to 18,000
feet). Updated infrastructure projects that extend fiber to the
neighborhood, curb, or basement of a building, reduce the distances
required to deliver VDSL to the end-user. However, it remains to be
seen how far carriers are willing to expand expensive fiber networks.
VDSL will not be a large-scale commercial solution, especially for the
residential market, until fiber is deployed further into the
- The final obstacle is the most straightforward
but most essential to overcome -- provisioning. Current DSL offerings
are being hindered by inefficiencies in provisioning and deployment,
providing added momentum to competing and substitute technologies such
as cable. Provisioning problems are tarnishing the image DSL as a
communications solution, similarly to the way provisioning contributed
to the failure of ISDN.
still in its developmental stages. So far, few carriers in the US have
chosen to deploy VDSL. US West has deployed to approximately 50,000
homes in the Phoenix area, and GTE has preformed trials in Tampa.
However, both companies have shelved their projects indefinitely due to
their respective mergers. Most recently, Bell Canada announced its VDSL
deployment to several multi-dwelling units in Canada and overseas,
France Telecom and Singapore Telecom recently announced VDSL