This post should get some discussion going. Here is a knowledgeable guy who thinks DSL is the best 'Last Mile' technology.
TeleVistas...Making Book on DSL
Posted June 09, 1999 12:00 PM PDT
Brought to you by PricewaterhouseCoopers L.L.P.
Contents:
The Vista From... Balaji Kumar, who believes DSL is a sure bet for the future
THE VISTA FROM...
Balaji Kumar, Vice President, Technology Planning, Terabridge Technologies
by Dr. Joan Van Tassel, Technology Futures, Inc.
He's the author of Broadband Communications Handbook: A Professional's Guide to ATM, SONET, Frame Relay, SMDS, and DSL, first published in 1995 with a second edition in 1998. His forthcoming book will be XDSL Architectures, to be published by McGraw-Hill later this year.
Kumar holds an EE degree, earned in India, a Master degree in computer science from the University of Missouri with an emphasis on telecommunications and company networking, and an MBA specializing in telecom management from the University of Dallas. He joined the R&D arm of Nortel, Bell Northern Research, where he was involved in the front end marketing -- defining the capabilities and products -- for next-generation ATM broadband networks targeted to interexchange carriers. He also worked on developing wireless strategies for the companies in the early stages of PCS. In 1992, Kumar was involved in the first ADSL trial conducted by Bell Atlantic, and came to believe that it would become the access technology of the future.
Kumar wrote his first book while at Nortel. He then moved to MCI where he evaluated access strategies and became senior manager for local network strategy. His work was to look at access strategy options such as DSL, wireless, and cable technologies, and to make recommendations to the company based on the implications each had for both U.S. and international market segments. Four months ago, Kumar joined Terabridge Technologies (formerly Telehub Communications).
Joan Van Tassel: How do you see DSL right now?
Balaji Kumar: DSL is a solution that allows service providers to take advantage of the 750 million copper lines that are deployed around the world. The last decade was spent figuring out how to get higher bandwidth out of the copper infrastructure, and people were looking at single-dimension solutions -- video over copper, video on demand, and data over copper. Now, they are talking about convergence over DSL because they realize they can do voice over DSL, and this is the big topic at Supercomm, which is going on now.
However, people are still having problems providing end-to-end solutions. From a customer point of view, they don't care what value DSL brings to them -- they just want to get things faster, cheaper, and easier. But, it is very difficult for vendors and operators across the "food chain" to put all the things together that they need to get there. So right now, the industry is going through the learning cycle of trying to understand all the processes and products that will be involved -- essentially learning other people's businesses.
JVT: How difficult is it to acquire that understanding?
BK: It's not easy. For example, a lot of DSL vendors are small startup companies. They know how to make DSL work -- getting information from point A to point B or from one end of the copper to the other -- but, then, they don't know what to do with it. So, you'll see solutions, and then the lines disappear into a cloud -- the communication "goes into the cloud," they'll say. Often, what that phrase really means is that they have no idea what's going on inside the cloud.
Then, you go inside the cloud with the traditional players, but management doesn't understand the small signals that keep coming up on the periphery of new technology horizons. They are afraid so they play defensively, and keep bouncing the ball between one another. The RBOCs have no clue about what they want, so they listen to the vendors. .
Right now, you see small technology companies offering point solutions for niche markets. Their whole strategy is to show something working and sell it to a large company, or to go public and then sell to a large company. The large companies who have the money don't know where the future is. They are lost in misinformation and competing technologies, so they just buy a whole bunch of companies to be in the market.
As long as stock prices stay high, they will keep their strategic spending up. Look at Siemens. They bought two or three companies, and none of them actually had a product. But the purchases added $2 billion to their market capitalization. By spending a few million dollars, the market reacts and drives up the stock price, which means they can buy more companies. Even if they buy 10 and only one is successful, they win anyway. So, that's the current strategy.
JVT: With all this activity, why it is taking so long to get widespread broadband access?
BK: All the legacy people don't want to move away from their embedded revenue base. They feel threatened because the decision makers don't understand the new broadband environment, and also because 90% of their profits come from traditional voice services -- a voice bit is a lot more valuable than a data bit.
They don't understand that value doesn't necessarily lie in bandwidth; rather real-time, instantaneous delivery is more valuable than bandwidth per se. Each level of management has a different agenda and a different idea of business value.
JVT: Protection of embedded revenues...isn't that why telcos dribble out bandwidth so reluctantly, even over 8-Mb/s DSL?
BK: Their pricing structure is designed to protect their T-1 market. Cable TV will serve as a competitive prod to bring telco marketing rates down. Cable is an interesting play to keep the RBOCs on their toes because there is no incentive for RBOCs to do anything. They will lose their existing revenue base, and they would be doing something they don't understand.
JVT: Whom do you see as the winner in last-mile access technology.
BK: I'm still convinced that the majority of future access will be DSL. It will get a huge chunk of that business and dominate future access. Other technologies, such as cable and wireless, will be niche players. The cable TV business is targeted toward a residential, mass-market environment because that is where they have their facilities. Also, the cable TV infrastructure is shared among multiple users, which is similar to an Ethernet or LAN environment. There's no QoS, and no controlled access of information -- it's a broadcast environment. However, you need these for a business customer if you expect them to pay for it.
Even when you are talking about speed, DSL wins. A recent study in Silicon Valley showed that DSL was much faster. But that's not rocket science -- in a shared environment, as you add users, you get congestion.
JVT: So, what do you see a little farther down the road?
BK: Today, Internet traffic is growing, but revenue isn't. For providers, the core revenue is voice services, and that won't disappear anytime soon. They aren't going to see big growth until they are able to leverage their networks where the real advantage lies: Delivering voice plus video in real time. This is when you will see the real value. This is where the future is.
Current videoconferencing sucks. It takes 20 minutes to set up, and the quality is bad. Delivering these multiple domains based on value to users is what carriers will have to do. But getting there will take some time, probably 10 years to roll it out to business customers. Then, once scale ramps up, it will move to residential customers within five years of that.
JVT: Tell me about your new book.
BK: The DSL book? I'm collaborating with Padmarand Warrier, who is a member of the Universal ADSL Forum. The book focuses on DSL technologies and architectures, and looks at both their pros and cons. Then, we will go inside the "DSL cloud" to the first point of switching in the access network.
JVT: Good luck with your book, and thanks for talking with TeleVistas.
More on DSL in my next column.
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TeleVistas is written by Joan Van Tassel, Ph.D., Technology Futures, Inc. |
