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Low-Speed DSL May Not Come Quickly
(01/23/98; 6:20 p.m. EST)
By Todd Wasserman, Computer Retail Week <Picture>Despite the backing of PC industry heavyweights, low-speed digital subscriber line (DSL) technology is unlikely to hit retail by year's end, analysts tracking the market said this week.
According to a Jan. 20 report by The New York Times, Microsoft, Intel, and Compaq Computer on Monday will announce backing of a low-speed version of DSL at the ComNet trade show in Washington, D.C. Executives from the companies said modems using the technology will hit retail by Christmas 1998, the report noted.
But some analysts believe full-scale deployment may be years away.
"It may be Christmas, but I don't think it will be Christmas 1998," said Lisa Pelgrim, an analyst for Dataquest, San Jose, Calif. Iain Gillott, director of people and telecommunications research for International Data Group, Framingham, Mass., agreed. "The cynical side of me says there have been lots of announcements, but little follow-through," he said. "These companies are good at making announcements."
Gillott predicts the number of DSL lines will jump to 7 million by 2002, a marked increase over 1996's 460,000 lines, but a paltry share of the U.S.'s 100 million households.
While a standards war over the technology is unlikely, hitches in deployment and pricing, and competition from other technologies, may slow down mass acceptance.
Deployment rests on the shoulders of telephone companies, which have disappointed many PC industry leaders, including Intel and Microsoft, with their halfhearted support of Integrated Services Digital Network (ISDN).
"I think [the phone companies] have learned a lot of painful lessons from ISDN," said Beth Gage, a senior analyst with Telechoice, Verona, N.J. "They've been extremely cautious with DSL."
"The technical challenge to doing [low-speed DSL] is very similar to ISDN," said Gary Law, vice president of marketing for Terayon, a Santa Clara, Calif.-based cable modem manufacturer.
Full-scale Asynchronous DSL (ADSL) has a daunting upgrade cost, but low-speed DSL, or "DSL lite," is a much cheaper and more tangible alternative.
DSL lite, which caps off around 1.5 megabits per second, reaches about one-fifth the speed of DSL. But while ADSL would require a bandwidth-separation device, called a splitter, to be physically installed in all households by the telcos, low-speed DSL is "splitterless." Nevertheless, the technology does require upgrades in the telcos' central offices, the base stations that send voice signals to customers' homes. Although some analysts have estimated the DSL lite upgrade cost at $100 per home, Gage was more conservative, projecting a cost from $300 to $800 per home.
The cost to end users has not been set. Mike Henderson, Rockwell's marketing director for ADSL technology, said he expects charges for DSL lite will be from $40 to $50 a month. DSL lite modems would carry street prices of around $200, he said.
Meanwhile, a number of technologies, including cable, satellite, wireless cable, and local multipoint distribution service (LMDS), will vie for the same customers. The cable industry, which released a workable specification for cable modems in December, will likely present the greatest challenge. 3Com has said it will release cable modems based on the specification early this year. Toshiba, Motorola, and Samsung also plan releases.
"The cable industry's about two years ahead of DSL," Law said. Even so, Law said retailers shouldn't expect cable and DSL high-speed modems to edge out today's 56-Kbps modems completely.
The most optimistic projections show about 9 million U.S. households using cable modems by 2000. Even as competition heats up between telcos and the cable industry, most U.S. households probably will not use either technology within the next two years, analysts said. <Picture: TW> |
