video dominates again in '05

Like most technologies in telecom, the access network is inextricably linked to regulatory developments. So it should come as no surprise that access equipment vendors will be among the biggest benefactors of the FCC's recent ruling that states can't require RBOCs to unbundle their fiber facilities.

While exact numbers are closely guarded, anecdotal evidence suggests that the next 12 months could be some of the best for access vendors in years. Just days after the ruling, Verizon announced a hiring binge and a more aggressive buildout of its fiber-to-the-premises (FTTP) network.

Throughout 2005, the access market will continue to focus on the content that rides over those networks and the various elements that consumers will need to access that content. Once again, topping the list will be video. In fact, it's a fairly safe bet that video will be the dominant access topic for the next three or four years, as traditional carriers are planning for major pushes into the sector (see “Digital telco TV subscribers”).

Among the more anticipated announcements next year will be the various revelations surrounding the largest incumbent carriers' video strategies and the vendors supplying the equipment. SBC Communications' decision to bring fiber to a neighborhood node, along with some recent comments by its top technology executives, has vendors buzzing about a video-based service that will do a lot more than mimic cable offerings and about exactly who might provide the copper-based equipment.

At the same time, BellSouth — while likely to launch a service that looks like traditional cable — appears to be among the more progressive-thinking companies in the market with its chief technology officer openly talking about the importance of on-demand services for content beyond movies and special events.

The independent telco market, which has been aggressively deploying IP video services, should continue seeing plenty of deployments with the largest carriers making a move into the market.

On the business side of the market, expect to see a lot of activity around Ethernet services-sized business market heats up. Serving those customers without cannibalizing traditional T-1 revenues is quickly fading as an issue for incumbents. According to a recent report from Vertical Systems Group, U.S. revenue from Ethernet services will grow at a compound annual rate of 36% from almost $300 million in 2002 to nearly $1.3 billion by 2007.

Technology split in Top 10 broadband countries [Q2 2004] (numbers of subscribers)

useful links

Broadband Content Distribution Forum:
www.bcdforum.org

DSL Forum:
www.dslforum.org

Ethernet in the First Mile Alliance:
www.efmalliance.org

Telco TV Show:
www.scievents.com/Telcotv04/