Study: VDSL to grow as ADSL stalls

Last year, ADSL (Asymmetric Digital Subscriber Line) dominated the market for DSL semiconductors with 90 percent market share around the globe. But as competition between broadband services heats up, especially in countries such as South Korea and Japan, many providers are choosing to upgrade their systems with the speedier VDSL. This transition means VDSL (Very high bit-rate Digital Subscriber Line) will outpace ASDL in terms of growth, according to a study by market researcher In-Stat/MDR.

"They are using faster speeds offered by VDSL as a competitive tool," said In-Stat/MDR analyst Sam Lucero.

In 2004, ADSL will continue to grow at a 52 percent rate due in part to the new ADSL2+ technology that delivers faster access. But in 2005, growth is expected to plummet to 14 percent, the study said. VDSL, on the other hand, will grow 71.5 percent in 2004 and continue its healthy rate at 65.3 percent in 2005.

Indeed, the battle between the incumbent ADSL and the emerging VDSL centers on bandwidth. At optimum range, ADSL2+ technology lets phone carriers deliver up to 24mbps of bandwidth into every home within a mile of the central office. That's enough bandwidth to deliver fast Internet access and streaming video through a common copper phone line.

But VDSL can reach up to 100mbps in bandwidth per household as long as the residence is within 1,000 feet of the central office. VDSL has gained popularity in Asia because population density is high, and providers can serve entire apartment buildings with one line. The limitation, however, occurs beyond a mile from the central office, where performance degrades to match ADSL2+'s 24mbps.

In the United States, phone carriers are spending billions upgrading their infrastructure with fiber optic lines. Some providers such as BellSouth and SBC Communications will continue to use existing copper lines into homes powered by ADSL2+ or VDSL technology.