To: StockDon who wrote (694 ) 8/30/2000 8:59:22 AM From: Perry P. Read Replies (1) | Respond to From DSL Prime Newsletter:Voice going homeFour separate conversations with telcos convinced us that residential voice is much closer than we thought, although none would go on-the-record. Above, we quoted one Bell about churn reduction when they can offer extra lines as needed, which the others agreed with. But perhaps more pressing is the need to compete with bundles. AT&T and Sprint ION (see separate items) are preparing to offer local voice, LD, wireless, and perhaps video on a single bill as an attractive package; SBC, Verizon, and US West are considering similar, but do not have the copper in many locations. Most of the press played up the Verizon Dallas trial, which officially is limited and oriented towards business. But Verizon's plans are much further along, ready to move into wide VoDSL for consumers in Q1, and SBC has been describing similar plans at industry events. The strategic decision is already made.The problem is CPE price and availability. Verizon, in trial with CopperCom, has not been offered the volumes they need in under 6 months, and the gateway vendors offering alternatives are just coming to market. (Broadband Gateway's Evolo looks gorgeous, but they don't have many available to test. 2Wire, however, should have some good news for us late in September.) Price is also a crucial issue; the effective cost of the added lines needs to be a few dollars per month to meet the market. The CPE is by far the largest cost, so $400 gateways totally blow the economics. Marketing spreadsheets require CPE around $70/unit, unrealistic at this point, but AT&T told us they are being offered equivalent units on the cable side for $100 less than DSL CPE. The manufacturing cost is similar, so the presumed difference is that CableLab's DOCSIS standards have created a competitive market. Two telcos implied they were ready to sign contracts that would dwarf any VoDSL deals to date, as soon as the cost comes down.
