BellSouth's IPTV strategy may pay off

Company's execs may not thump their chests about it, but analysts say the local phone carrier is well-positioned.

CHICAGO--A decade-old bet on fiber-optic cables could end up paying big dividends for BellSouth.

While other local telephone carriers waited until regulatory issues were ironed out before deploying fiber into homes, BellSouth plowed ahead and deployed more than 5.2 million miles of fiber. It was considered a big risk at the time, because regulators could have forced the company to share the network it was building.

Now that risky deployment is paying off. Today, BellSouth serves more than 1 million homes with fiber technology, which can carry far larger volumes of data than traditional copper lines, and expects to increase the number of customers it can reach with fiber by another 10 percent this year.

"The fact that they've been deploying fiber for several years could make them winners."
--Qaisar Hasan, analyst, Buckingham Research

That means that BellSouth, as it and all the other Bells fight for consumer dollars with an ever-growing list of competitors, is nearly ready to deliver data-intensive services such as Internet Protocol Television, or IPTV, to consumers. And with local customers dropping phone service for cellular phones and Voice over IP, or VoIP, the ability to deliver IPTV into the home could be a key to survival in years to come.

"BellSouth is in a very good position," said Qaisar Hasan, an analyst with Buckingham Research. "The fact that they've been deploying fiber for several years--and their choice of technology--could make them winners."

As the Supercomm telecommunications trade show wrapped up here at the giant McCormick Place convention center, it was clear that IPTV was getting plenty of attention from phone company executives. Many consider getting into the TV business a logical way to fight back against cable TV carriers invading their local-phone-service turf. But it won't be an easy transition, as BellSouth's success and challenges reflect.

The local carrier's future in IPTV hinges on two major factors: Its technology and the regulatory environment.

The local carrier's future in IPTV hinges on two major factors: Its technology and the regulatory environment.

For that elusive final connection into the home, BellSouth has committed to using Asynchronous Digital Subscriber Line and similar ADSL2+ technologies, which will allow the carrier to offer about 12mbps of capacity on a single copper strand. Using a technique called bonding, which uses two copper strands instead of one, BellSouth says it can boost capacity to up to 24mbps. It is also considering working with very-high-bit-rate DSL (VDSL), which can deliver data as fast as 100mbps.

"The magic number for broadband bandwidth is

 

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