This access technology buys operators more time to bring fibre to the edge of the network, extends the useful life of legacy copper and increases bandwidth to the home for HDTV services. By Philip Hunter

IPTV is leading many Telcos in an almost unseemly rush towards VDSL2, widely seen as the first DSL standard truly capable of delivering multi-channel HDTV services over IP. Some Telcos, such as Swisscom and Deutsche Telekom, have taken the slight risk of deploying VDSL2 before final ratification of the standard, driven by competition from cable operators eating into their voice and broadband customer base. Others plunged straight in with VDSL1 for similar reasons, rather than risking early VDSL2 products, although they plan to move that way now.

Predominant technology

With analyst groups such as Dell-Oro predicting that VDSL2 will become the predominant DSL technology within about three years, it is worth considering whether it represents the last way station on the road to FTTH. VDSL2 aligns well with longer term FTTH roll-out strategies, requiring many Telcos to push fibre deeper into their networks and install cabinet based nodes beyond the exchanges in order to bring copper loop lengths within 1km (see box). So while VDSL2 deployment will initially be held back as the additional fibre is being installed, VDSL2 will then solve the HDTV problem and provide breathing space before operators finally bring fibre to the home. In actuality, the latter may take years, particularly in older European cities within which the cost of taking fibre over that last kilometre will be most prohibitive. The economic case for VDSL2 as a staging post to FTTH is compelling, and not just in Europe, according to Danny Goderis, director of product and solutions marketing for access networks at Alcatel. “Let’s say you take the CO (central office) based approach as a reference. Then if you go to FTTN (Fibre-to-the-Node), with cabinet deployment, your costs are multiplied by five,” said Mr. Goderis. “So it is a big investment to go to VDSL2, but if you look to fibre to the home, your costs are multiplied 15 times.” Therefore, given a constant infrastructure investment rate, a Telco can bring VDSL2 to most customers in about a third of the time needed for FTTH, instead of having some customers wait much longer than others, as has been the case with ADSL.

Asia introduction

VDSL first made its mark in the Asia Pacific region, especially South Korea, where VDSL1 deployments began in 2001. South Korea deemed VDSL1 to be perfectly suitable for its towns and cities where there are many apartment blocks, skipping ADSL2 and ADSL2+ altogether. Furthermore, VDSL1, which is capable of delivering 50 Mbps downstream, is quite sufficient in many cases for multi-room HDTV. The incentive to upgrade to VDSL2 is therefore less there than it is in Europe or the United States. In Europe, by contrast, Telcos are likely to leapfrog straight to VDSL2, with a few exceptions (such as Belgacom, which uses VDSL1). But there is another factor to consider there: the impact of third-party infrastructure funding, whether from the State or as part of a new building development. Such funding increases the appeal of FTTH by taking out a significant percentage of the overall deployment cost. This would bring the cost of FTTH to only twice as much as FTTN for a Telco; sometimes less, depending on the individual funding arrangements.

US impact

VDSL is set to have a significant impact in the US, where, assuming that the pending $67 billion acquisition of BellSouth by AT&T is approved by federal regulators, there will only be two Tier-1 DSL providers; making for an almost straight fight with the only other US Tier-1, Verizon. While Verizon, set to reach six million homes with FTTH by the end of 2006, is going straight for the end-game, AT&T’s U-verse triple-play service will reach users via its predominantly FTTN/VDSL2-based Project LightSpeed network. Qwest, meanwhile, has been providing broadband TV for more than six years but it has been over VDSL1 (via ATM not IP).

BellSouth had been planning to deploy ADSL2+ in its residential network, for broadband access at 12 Mbps, but the AT&T acquisition, combined with the spectre of multi-room HDTV, has prompted a rethink. It now looks as if there will still be some ADSL2+ deployment, but BellSouth has also been working with multiservice equipment vendor Tellabs on VDSL2 and recently announced plans to upgrade 10 per cent of its residential customers to 50 Mbps during the second half of 2007.

VDSL3 or UDSL?

All of this suggests that VDSL2 may be the final step for the DSL group of standards, although there is another version on the drawing board, sometimes called VDSL3, or UDSL (Universal DSL), whose main additional advantage would be support for full symmetrical two-way 100 Mbps service with the ability to configure the relative upstream and downstream rates dynamically. It may be that UDSL will take over if the upgrade requires no more than replacement of line cards, but probably not if further fibre installation is required. In that case, Telcos might decide they may as well go all the way.