Like fish that soar out of the water there were several trends that became visible at the telcos’ NXTcomm08 telecom trade show held in Vegas this week.
The first was copper wires and new technologies that’ll allow broadband speeds upwards of 50 Mbps over the telcos’ existing copper wires and are compatible with their existing DSL broadband – no new wires required. It’ll enable telcos to offer pay-TV, making them more competitive with the service bundles and broadband speeds the cablecos offer.
The next was mobile broadband, real broadband, not the dial-up speeds that are offered today over cellular networks, which is coming. It’ll have an impact that no one can foresee anymore than the Net’s effects were anticipated. WiMAX wireless broadband will become available in September, starting in Baltimore. Verizon’s CEO Denny Strigl said that LTE, the cellcos’ competing wireless broadband technology, would move into testing by year-end.
Then these was infrastructure, and the coming bandwidth bottleneck that’s caused by the proliferation of Internet-delivered video, which is getting lots of attention and money from incumbent telcos and their vendors. New and more powerful hardware, better video compression schemes and use of P2P technology are some of the solutions being developed.
Finally home networks fed by fiber optic networks (100 Mbps), higher speeds over existing copper wires (25 Mbps to 50 Mbps) and the cablecos’ new wideband broadband (100 Mbps to 160 Mbps) will get video to the home, even multiple HD video steams. At that point, the home network becomes a bottleneck, a possible leak of protected data and a technical support problem for telcos and cablecos. Technologies and customer support aids are being developed to reduce the problems and protect copyrighted content.
Continued development of new VDSL2 technologies means the telcos can offer higher speed broadband, competitive with what the cablecos currently provide, to more homes than previously thought – and sooner, without having to run fiber.
The new VDSL2 technologies promise speeds upwards of 50 Mbps to the home. Those speeds are more than enough for two or more HD TV channels, especially if MPEG-4 video compression is used, with ample left for high speed Internet access.
The new VDSL2 technologies are compatible on the same network with existing but slower DSL and ADSL broadband. Some homes on the network can get the higher VDSL2 speeds while other homes on the same network can still use DSL.
There is no doubt that fiber optic to the home is as much as ever the future, perhaps even more so now than in previous years with the rapid increase in online videos and the telcos’ need to sell pay-TV. However, the telcos’ copper wires have a lot of future left. VDSL2 makes the telcos’ broadband speeds more competitive with what cablecos currently have, and it allows them to offer pay-TV services.
Let’s face it. It’ll be three years to five years, perhaps longer, before every home in North America and Europe gets a fiber connection. Using their copper networks is essential to telcos in the short term, as AT&T is doing with its hybrid fiber/copper U-verse network. Even fiber focused Verizon is using the existing copper wires in multi-family buildings to deliver its FiOS pay-TV and broadband to each residence from where fiber ends at the building’s side or basement.
AT&T has been using an early version of VDSL2 that Alcatel-Lucent developed. It gets high speeds to nodes near the home with fiber (FTTN) and then use existing copper wires to deliver higher speeds and even HDTV to the residence from the node.
Verizon says it’s using VDSL2 within multiple dwelling units (MDUs) after connecting its FiOS fiber optic wires to the building. It will soon begin offering FiOS to small business that are physically clustered such as strip malls and small office buildings with the same hybrid fiber/VDSL2 network – fiber to the building, existing copper wire within the building.
Hundreds of smaller telcos are using VDSL2 to upgrade their existing copper network, at least until they can get a fiber wire to every residence.
An informal survey of telcos in mid-America showed that none expected to have any copper wires left in the ground in five years – but that’s a long time when the local cable TV operator is taking their phone subscribers by bundling phone, pay-TV and higher speed broadband.
Verizon promises it’ll have run its FiOS fiber network to 18 million homes by the end of 2010. The 18 million would still leave six million of Verizon’s phone subscribers with no broadband or only low-speed DSL broadband. That’s a long time to leave its phone subscribers that don’t have broadband and its DSL broadband subscribers as low hanging fruit for the cablecos to pick off.
An examination of the telcos’ DNA would undoubtedly show a pair of copper wires that they have depended on for revenue for decades. What with two US telcos being the largest mobile phone service providers – AT&T and Verizon’s Verizon Wireless, perhaps it should not be surprising that there was so much talk at NXTcomm about wireless broadband.
Sprint added to the mobile broadband fire with two presentations about its WiMAX wireless broadband. Sprint chief Dan Hesse talked almost only about WiMAX wireless broadband in his keynote, almost as if the company’s Xohm WiMAX were not being transferred to Clearwire. Edwin Zargarian, in charge of strategy and development for Xohm at Sprint, provided even more details than Hesse about the company’s WiMAX plans.
AT&T chief Randall Stephenson talked almost exclusively about current (cellular) and future (LTE) wireless broadband and the economic and emotional benefits it’ll bring the world.
Verizon president and COO Denny Strigl is credited with having built Verizon Wireless into one of the world’s most successful cellcos before moving over to run the mother ship. Need more be said about Verizon’s hopes for mobile broadband?
One consensus seemed to be that this is the year, finally, when mobile content emerges as a money-spinner. Several reasons were given: increasing sales of smart phones with better screens like the iPhone, faster speeds even over creaky cellular networks, better data compression and more content and entertainment services that are designed specifically for mobile devices such as social networking. Most agreed that it was the launch of the iPhone last June that stimulated everyone else to get their digital media act together, including the corporate Blackberry that now has a built-in camera.
Infrastructure may be an eye-glazing topic for many but unless the Internet’s plumbing – its so-called backbone – is significantly upgraded, the Net could get so overwhelmed with video that it would slow down to dial-up speeds.
The good news is that the telecom industry, both service providers and the companies that make the network gear they use, are very, very aware of the potential problem and working to develop and deploy better technologies.
Attendees saw reams of statistics about the Internet’s traffic, mostly caused by consumers using the Net as a, or even THE, source for information and entertainment videos, everything from HD films to video blogging. Charts that projected Internet usage were in practically every presentation, whether by a CEO of a multi-billion dollar company or a one-man consulting firm.
One consensus seemed to be that merely deploying more of the existing technology just would not solve the problem. New technologies will have to be and are being developed.
There is too much money – hundreds and hundreds of billions – riding on the Internet’s success for the industry not to go full speed in coming up with significant improvements to the infrastructure.
Only a few years back the telcos made very clear that their responsibility stopped when they connected a residence to their network. They wanted no part of the home’s internal network and especially the devices that consumers are connecting. That attitude has completely changed now.
Telcos now see that they must get involved in helping their subscribers install, monitor and manage the home network and its connected devices. The pay-TV systems that AT&T and Verizon are installing come with built in home network protocols so that users can connect the home gateway to TV sets. PCs and other devices that are on a home network also want some of the bandwidth that is set-aside for delivering TV signals.
The telcos also see an opportunity to generate more revenue from their involvement in the home’s network, especially from offering other services such as security, surveillance and energy management.
Verizon, and perhaps others, is involved in developing a new, more powerful router that the company thinks will make it the control center for the home network.
Additionally, new home networks are being developed such as G.hn, which the ITU, the telcos technical organization, is overseeing the development of. It promises one network standard that will run on any and all of the wires a home might have: coax, electrical wires and phone cables.
Topics that were not as visible, at least to us, but perhaps should have been, were:
– Mobile TV
– IPTV seemed to occupy less meeting time.
– DOCSIS 3.0, Wideband and true2way, which cablecos are deploying to compete with the telcos. In fact, the only mention of those three new technologies came from CableLabs president Richard Green’s sparsely attended keynote talk. Odd, isn’t it, when the competition comes over to tell you exactly what it’s going to do to take your customers and no one shows up to listen.