From Telephony Magazine, (http://www.internettelephony.com), Feb. 22, 1999:
AM REPORT
Lucent boosts Jato's DSL liftoff
HANNA HURLEY
Jato Communications, a new data competitive local exchange carrier, has entered the digital subscriber line market with strong support from Lucent Technologies. Targeting under-served markets in 14 states, Jato will roll out services in three or four areas by the end of 1999 and in a dozen markets in 2000.
Jato's second-tier deployment strategy lets it avoid competing head-to-head with national DSL providers such as Covad Communications, NorthPoint Communications and Rhythms NetConnections.
"We wanted to be the bigger fish in a smaller pond," said Brian Gast, president and CEO at Jato. "There's lots of attention in the top-tier markets. We saw more opportunity in being the first-to-market in other areas."
Lucent, in an agreement worth $50 million over seven years, will engineer, design and maintain Jato's network infrastructure. "After looking at the DSL market last year, we became confident that the small and medium-sized business space was a key area for Lucent," said Linda Manchester, director of DSL.
Although Lucent is working with other DSL providers, Jato appears to be its showcase client for the moment.
While Lucent concentrates on maintaining and monitoring the network, Jato will provide service and marketing to its channel partners. "Our partner plans and programs are built around providing market and sales qualifications," said Gast.
Jato's DSL service is designed for small and medium-sized businesses, and the deployment is expected to reach 80% to 85% of business customers and 60% to 65% of residences within its target cities.
Though adding another competitor, one NorthPoint official viewed Jato's entry as a positive move for the market. "It's a confirmation of DSL as the technology of choice," said John Stormer, vice president of marketing at NorthPoint.
In related news, the ADSL Forum plans to provide more confirmation and support for the technology. With DSL's adoption rate lagging behind cable modem services in the residential market, the forum has designed a "Hook Up America" campaign to educate and promote DSL throughout the country.
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Taking a bite out of the DSL market
Nokia acquires Diamond Lane
LIANE LABARBA
In a move aimed at grabbing more digital subscriber line market share, Nokia last week said that it would acquire Diamond Lane Communications Corp. for $125 million in cash. Diamond Lane, founded only four years ago, develops multiservice DSL access multiplexer devices.
Nokia has been an investor in Diamond Lane since 1997, and the companies already have integrated products. "Telecom New Zealand, for example, is using products we developed jointly," said Jerry Parrick, CEO of Diamond Lane.
"What we are seeing now is part of a larger trend where European and Japanese companies have been late to the telecommunications game. Now some of them are trying to change that," said Lee Doyle, vice president of data communications for International Data Corp. "Having a good DSL solution is part of that."
"The question is, where does Nokia want to go with data communications?" asked Doyle. "They are currently not in a position to compete with Nortel and Cisco."
While Nokia is after Diamond Lane's DSL strength, Diamond Lane is elated by the financial and technical strength offered by Nokia.
"Our combining with Nokia will enable us to compete for a major share of the global DSL market," Parrick said. "This will enhance the scope of our products and reach a larger customer base immediately."
According to Parrick, all senior management will remain, and Nokia is interested in keeping the other employees as well.
Diamond Lane, which counts Covad Communications and Vitts among its customers, will now become Nokia High Speed Access Products.
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Putting the plug and play in ADSL modems
Alcatel teams up with Efficient for USB capability
LIANE LABARBA
Ease of use is definitely driving this agreement. After six months of negotiations, Alcatel has paired up with Dallas-based Efficient Networks to develop universal serial bus asymmetrical digital subscriber line modems, which will be optimized for ease-of-use and customer installation.
The companies have also agreed to produce modems compatible with the G.Lite (G.992.2) splitterless specification once ratified. The products will be compatible with Alcatel's 1000 ASAM ADSL access multiplexer (DSLAM). The companies aim to cut costs for carriers, Internet service providers and competitive local exchange carriers and are helping spur DSL rollouts, said Greg Langdon, vice president of marketing at Efficient. "Companies like SBC, GTE, Ameritech and PacTel are our major targets," he said.
Southwestern Bell, which already uses Alcatel's DSLAMs, is one of the first potential candidates for the USB modems, which in their G.Lite version also carry the benefit of no splitters.
"This is a move in the right direction for DSL. With no splitter required and no need to open up a computer, a lot of the truck roll should be eliminated," said Laurie Falconer, DSL analyst for TeleChoice. "This will be a true plug-and-play product. Residential users are not that high tech-oriented, and this will make it easier for them to sign on. What I didn't care for was the lack of product information regarding pricing and time to deployment."
Company sources indicated that the product would be available early this year. Efficient, which names Covad Communications, Ameritech and Singapore Telecom as clients, already has a USB ADSL modem on the market, the SpeedStream 4020. According to a company spokesman, that device is only compatible with Analog Devices' silicon. The new product will be compatible with Alcatel's DSLAM.
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