By Jay Pultz, Gartner analyst
Many compelling economic reasons exist for the Baby Bells and smaller
competitive local-exchange carriers to embrace
Voice-over-DSL (digital subscriber line), or VoDSL, enables multiple voice calls
and high-speed data to share the same DSL bandwidth on a single copper wire.
Installing additional copper lines is not necessary to offer additional
voice services over DSL. Therefore, the cost and time needed to provide
services are reduced. The technology is maturing and will help Baby Bells
such as SBC Communications to get the most out of their infrastructures.
VoDSL is even more important to CLECs, those smaller alternative carriers
made possible by the Telecommunications Act of 1996, which must obtain their
copper lines from their competitors, the Baby Bells. Consequently, those
alternative carriers want to minimize the number of copper lines that they
need and maximize their revenue per line to improve profitability. VoDSL
enables that by integrating voice and services on the same DSL bandwidth.
Bells like SBC recognize that they must stay on top of this trend and
improve the economics of their infrastructures. Furthermore, VoDSL paves the
way for integrated voice and data applications over the Internet. Looking
further into the future, VoDSL presages using DSL for much more than just
Internet access: Future DSL applications will include video streaming,
personal videoconferencing, interactive gaming and product distribution.
Gartner's Dataquest has the following perspectives on VoDSL:
• 2001 will be the year in
which VoDSL begins to grow strongly. The market for VoDSL services
will grow to $7.3 billion by 2004, with VoDSL lines in service growing from
approximately 36,000 in 2000 to more than 14 million by 2004.
• North America will lead the
market for VoDSL worldwide. Even in 2004, 75 percent of VoDSL revenue will
originate in North America. VoDSL will begin to grow strongly in Europe and
Asia/Pacific when unbundling of the local loop in those regions provides
alternative providers with the incentive to launch.
• VoDSL will be ideally suited
to the small business and high-end residential markets. By 2004, the
residential market will account for 52 percent of commercial VoDSL ports.
However, because of the higher proportion of lines and revenue per line for
small business customers, the small business segment will provide revenue of
$6 billion by 2004, representing 82 percent of total revenue.
• The emergence of VoDSL will
encourage a change in the distribution model for voice and data services.
Traditional customer ownership by the Bells will be challenged by an array
of alternative providers.
• VoDSL could help increase the interactivity in e-commerce transactions.
Voice commerce applications, such as push-to-talk for online purchase, or
voice-enabled Web site customer service, could lure more customers.
In conclusion, with a relatively small investment of $47 million, SBC's
venture arm has funded additional competition and technology development
among VoDSL suppliers that, in the long run, will only work to SBC's
(For related commentary on telephony over the Internet, see
TechRepublic.com-- free registration required.)
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