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DSL Providers Working to Close Broadband Gap
23 Jan, 2008
AT&T announced the launch of a 10Mbps DSL tier for U-verse customers. The new tier offers 1.5Mbps in upstream bandwidth, and is priced at $55 month. Embarq also recently announced a 10Mbps tier. Verizon regularly flexes its broadband muscle with FiOS, but also introduced a 7Mbps DSL tier recently. All this adds up to catch up time. DSL providers are transforming themselves from just a “value” alternative to more expensive and faster cable modem service. They are now trying to meet cable’s speed advantage head on. Cable has regularly tried to draw attention to their faster broadband speeds and have effectively labeled DSL as "slow" or the "new dial-up."
The battleground is now shifting away from speed comparisons to "value add" comparisons. As cable’s speed advantage wanes, both camps are now looking to provide value add services as a differentiating factor. For example, AT&T also announced that subscribers to their DSL service also gain access to AT&Ts 10,000 Wi-Fi hotspots at no additional charge. Both Verizon and AT&T are also adding convergence features for their broadband and video customers in an attempt to build value for bundled subscribers. Cable companies have their fair share of value add strategies as well, including free security suites and online gaming options. I suspect we’ll see the value add strategy intensify, and beyond the "usual suspect" value add features, expect telecom competitors to leverage their strength in wireless and cable to leverage their experience with video. Should be fun to watch.
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It's interesting that companies like AT&T get this press about "10 Mbps" DSL. The reality is the footprint where it is available is so small, it makes it insignificant. The vast majority of markets where AT&T competes with cable will still have "slow" DSL.
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Time to Prepare for DOCSIS 3.0 is Now
07 Aug, 2008
Second quarter results for broadband growth were a tad underwhelming. There are any number of factors which probably contributed to this slowdown, with the economic slowdown and housing crisis certainly towards the top of the list. But growth is also slowing because broadband penetration has grown considerably over the past few years, now ranging somewhere between 50% to 60% (depending on who you ask), and is beginning to slow down. There certainly is more room for growth, but at some point in the near future, broadband penetration will slow even more as it approaches saturation. It’s anyone’s guess what saturation is, but I would bet somewhere around 75% penetration of households (as a national average - individual markets will vary widely). From a service provider’s point of view, that suggests that posting continuing net adds of broadband customers will increasingly involve convincing a competitor's broadband customer base to switch service.
The "new" dial up is the old dial up
In much of AT&T's service area, there's no residential or business class DSL at all. There, it's not AT&T's "new" dial up. It's the same old dial up that was state of the art when Bill Clinton was beginning his first term as president.