VDSL Delivers—and Just in Time for Telcos to Battle with Cable Operators

06 May 2013

The Internet access technology known as VDSL is enjoying a new lease on life after having been nearly written off, with its speedy transmission rates now proving to be an attractive option for telcos compared to expensive fiber technologies, according to an IHS iSuppli Broadband & Digital Home market tracker report from information and analytics provider IHS.

VDSL-or Very-High-Bit-Rate Digital Subscriber Line-is set this year to enjoy impressive 40 percent subscriber growth. The global installed base will rise to 42 million, up from 30 million in 2012. The largest markets for VDSL, the most advanced form of DSL technology, will be found in Europe and North America as well as parts of Asia.

Robust growth exceeding 25 percent is in store for the VDSL market each year until 2017. By then, the installed base will amount to some 107 million users. Overall, the five-year increase from 2012 amounts to a notable 256 percent.

In contrast to VDSL, competing technologies are forecast to advance more slowly. ADSL, an aging cousin of VDSL with much more limited bandwidth, will grow subscribers incrementally for the next few years and then start declining in 2017. Meanwhile, super-fast but costly fiber-to-the-home (FTTH) will not see subscriber expansion rates exceed 22 percent at any point in 2013 as well as the next four years.

With speeds ranging from 25 to beyond 100 megabits per second (Mbps), VDSL can support bandwidth-intensive triple-play services for video, voice, and Internet over a single connection. Such attributes have increasing appeal to consumers and carriers alike compared to FTTH, which has proven to be an expensive proposition-costing consumers more for the service, and dear for telcos to deploy.

FTTH continues to be growing rapidly in China and other countries where government subsidies are available to help deployment, but the technology has stalled in North America and Europe because of the lengthy return-on-investment involved.

Meanwhile, VDSL has been widely implemented. Moreover, its latest version, known as VDSL2 with vectoring, has done well in numerous carrier field trials for well over a year, and its capabilities appear to be in line with projected consumer demand for a number of years. Vectoring technology largely eliminates noise due to crosstalk-a major barrier to achieving VDSL bandwidth potential.

The consensus is that VDSL has finally found its place in the broadband market, especially in mature territories such as the United States and Europe. And while not a substitute for FTTH, VDSL could fill a short-term niche for telcos scouting for an inexpensive solution as a bridge to a more future-proof FTTH network.

The turnaround for VDSL has been dramatic, as the technology was considered a disappointment five years ago and had appeared headed for a shut-out by then more competitive FTTH. However, the global economic crisis shortened ROI horizons for carriers, delaying FTTH deployments and giving VDSL vendors precious time to perfect vectoring technology.

Telcos vs. cable operators: the war continues

VDSL could prove especially helpful to telcos in their continuing battle against rival cable operators to snag more patrons for their respective offerings. In the United States, the telcos are represented by giants AT&T through its Uverse service, as well as by Verizon with FiOS. Cable operators, meanwhile, take the form of equally gargantuan entities such as Time Warner or Comcast.

As part of their arsenal, cable companies have been deploying the broadband standard known as DOCSIS 3.0-Data Over Cable Service Interface Specification-which uses a portion of the cable frequency spectrum to transmit broadband data alongside traditional cable video and voice services. DOCSIS 3.0 makes wideband service tiers available to consumers that otherwise might be lured away by FTTH competition, doing so via an existing infrastructure requiring relatively little new investment.

With cable operators possessing next-generation broadband, telcos were left scrambling to find a cost-effective solution besides FTTH, so advanced VDSL solutions appear to have arrived just in time to help solve the telcos' problem. VDSL with vectoring answers the threat posed by DOCSIS 3.0 on the one hand, while also avoiding the expense of a costly deployment previously associated with FTTH.

In its current form as VDSL2 with vectoring, the technology could well give telcos up to five years of breathing room before they need to start deploying FTTH in order to remain competitive, but the window could possibly extend to 10 years, IHS believes. This could be the case especially if high-bandwidth applications do not materialize to consume more bandwidth.

For VDSL then, the stars have finally aligned-and the technology appears set to stay for some time to come.

Read more >> FInally, the Stars Have Aligned for VDSL

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