ADSL Puff Piece In Irish Times May Be Smokescreen
0630 Hrs 14 July 1999
An article in yesterday's Irish Times about how Telecom Eireann was going to introduce ADSL bore all the hallmarks of a Telecom Eireann smokescreen. The last time that TE had been promoted in such a way was just before it was annouced that the Flat Rate internet access the TE was promoting so loudly was not given the go-ahead by the ODTR.
The article had obvious technological errors such as calling ADSL Asynchronous Digital Subscriber Line. It actually stands for Asymmetrical Digital Subscriber Line. ADSL is a better and more advanced solution than cablemodem technology. Some of the claims made in the article were at best optimistic and at worst unreal.
TE has been conducting internal ADSL tests for the last year or so. In the past few months TE has widened the ADSL tests to non-TE employees connected to a few key Dublin telephone exchanges. The details have been covered in HackWatch. In fact it was HackWatch that first exposed TE's ADSL experiments.
The prospect of Cablelink/NTL implementing cablemodem internet access in some of TE's key urban markets has obviously upset people in TE. If the implementation is successful, TE could very well find itself marginalised to the rural areas as customers deluge from TE to the Cablelink/NTL services which apparently will also offer telephony. With NTL also making plays for other cable companies, TE could find itself up against some serious competition. That is not the kind of information that TE would like investors hearing. TE has not had competition on this scale before and nobody knows precisely how it would work out. The competition is leaner and used to competing in tough markets - TE is a lumbering behemoth that has popped a few slimming pills but still has rounds of excess fat.
A source, apparently close to TE, quoted in the Irish Times article claimed that though the company was slow at implementing new technologies and services, it could move quickly if it considered the new service is strategically important. Survival is a bit more than strategically important. If Cablelink/NTL beats TE by implementing cablemodem internet access, TE will probably not recover lost ground.
Telecom Eireann has apparently been testing ADSL outside of Dublin. Details are scarce but it is believed that some research has been carried out in WIT. However it is hard to believe that the source quoted in the Irish Times had anything other than a passing acquaintance with reality. Implementing ADSL on a national basis would not be possible at the moment due to the bandwidth and logisitical constraints that TE faces.
In some areas of Dublin, some people are still waiting for the installation ISDN lines ordered in February. ISDN is still being sold at £348 plus VAT for an installation. It is highly doubtful that TE has the necessary internet bandwidth between cities to cope with a widespread deployment of ADSL. Logically they would have to stagger the implementation.
ADSL or the lite version that will be offered to TE subscribers allows an uplink bandwidth of 640K and a downlink of 1M5. Pitching this against the price that TE charges for a measly 64K leased line connection causes financial and technical problems for TE. It would be very easy for all of TE's internet links to be overloaded in a matter of seconds unless throttling (bandwidth limitation) was in place. Why pay TE upwards of £4500 for a 64K leased line internet connection when you can get a superior ADSL connection?
The exchanges will also have to be upgraded for ADSL. This will be an expensive and time consuming operation. In addition, an ADSL box will have to be fitted at the subscriber's premises. This would all take time and money. TE will have to invest heavily in the new technology. And there is always the looming problem of other companies' access to the local loop.
Optimistically speaking, TE could begin a staggered implementation of ADSL in the Autumn or Winter of this year. Such an obvious puff piece has it's value especially in a volatile market. Telecom stocks have plummeted on the world's stock markets over the past few days. Anything that makes TE look good is useful. Though TE's shareprice did not fall as steeply as other bigger stocks, it needs to appeal to the institutional investors. Many of the small private investors will try to capitalise by selling their shares - the logical effect would be that TE's share price will fluctuate over the next few days.
Section: Telecoms News
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Court Ruling Blocks Third Mobile Network 05 October 1999
Telia To Sell 14% Eircom Shareholding? 1999
Irish Times ADSL Article - TE Smokescreen? 14 July 1999
TE's ADSL Plans - Fast Forward To The Past 28 June 1999
NTL Buys Cablelink 07 May 1999
ODTR To Rule On Flat Rate By May 10 March 1999
Flat Rate Access In Two Weeks? 17 February 1999
TE's False Flat Rate Plan 20 November 1998
Secret TE ADSL Test Programme Revealed 01 November 1998
Irish ISPs Get Into Net Telephony 21 August 1998
£117,000 Phonecard Scam Smashed 12 June 1998
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