FRANCE: NEWS ANALYSIS - FRANCE TELECOM BITES THE TRIPLE PLAY BULLET. FRANCE: NEWS ANALYSIS - FRANCE TELECOM BITES THE TRIPLE PLAY BULLET. Communications Week International, 15-Jul-2002 By Michelle Donegan. Commercial VDSL gets closer in Europe this fall as FT considers bundling video, data and voice over its copper network. In October, France Telecom will decide when and how to deploy very high bit rate digital subscriber line (VDSL) equipment, making it one of the first European incumbent operators to plan commercial video deployments and commit to the telco "triple play." "It's clear VDSL will be the medium (for video services)," said Benard Monti, director of standards at France Telecom, based in Rennes. While France Telecom has a wholly owned pay TV satellite subsidiary as well as cable network interests, the operator wants to deliver video over its core copper-based network. Other operators see VDSL triple play as imperative. "If you do not do it, you'll lose your voice and long-distance business ... Cable companies may make a strong move," said Clayton Mangione, director of technology development at Bell Canada, based in Toronto. In the U.S., Qwest believes that video services, and in particular broadcast TV services, are crucial to making the investment in broadband infrastructure worthwhile. "Video is an enormously helpful piece in justifying the rollout of broadband networks," said Chris Coles, executive vice president of video services at Qwest Communications in Denver. "Broadcast has to be offered as part of that. Some will dabble with video on demand, but that's not sufficient to grab the attention and hearts and minds of American consumers." But the telco triple play is not without problems, especially on the operational side. Deploying video requires new systems and integration into telco legacy systems, not to mention acquiring content distribution contracts. "Telcos have had issues with the core infrastructure and integrating that with broadcast and content and making that economic," said Marc Curtis, marketing director of Fujitsu, of Birmingham, which recently added video and digital TV capabilities to its ADSL access platform. While VDSL has higher capacity and offers better quality video, some vendors think operators are focussing on ADSL because it costs less to deploy. "The general attitude of most U.S. ILECs is that VDSL requires a lot of new electronics to be deployed in the field. They find that as bandwidth demand grows over time, VDSL won't grow as well," said Niel Ransom, chief technology officer at Alcatel SA in Paris. A few niche operators are using asynchronous digital subscriber line (ADSL) networks to deliver video services, either via wholesale offerings from incumbents or through their own equipment. London's Video Networks, Italy's FastWeb, Canada's Aliant, and the U.K.'s Kingston Communications all have commercial video over DSL services. But Kingston, for one, has cut back on future rollout plans and is trying to increase the average revenue per user of existing customers. Analysts warn that telcos must take a long-term view on getting returns on invested capital where video over DSL is concerned. For the video on demand (VOD) market in particular, Datamonitor says that European operators won't see a return on investment until 2006, and that the Nordic region is the only place where VOD will be profitable sooner. "It's not actually the capital costs, but the operational costs - all the costs with running the services and running the video streams over the networks," said Panni Kanyuk, managing analyst at Datamonitor, based in New York. "It's not going to be an easy game." Standards arrive Speeding the technology along is the standardization work of the FS-VDSL Committee, which recently finalized end-to-end specifications for deploying VDSL. Standards-based products will be available within the next year, which will increase choice for operators and bring down the price of equipment. Bell Canada says it has been "crawling" toward VDSL because of the lack of standards-based products, but will begin an aggressive rollout in 2003. The operator targets the multi-tenant dwelling units (MDUs) market with VDSL and already has about 600 customers in four multi-tenant dwelling units (MDUs) in Toronto. The aim is to reach 12 buildings by the end of the year. Mangione says his cost for rolling out VDSL is between 1,000-1,200 Canadian dollars per line-including the set-top box and all outside plant-compared to C$300-$500 per subscriber for ADSL. In Finland, RSL COM Finland Oy has launched VDSL trials, with equipment supplier VDSL Systems targeting business customers in Helsinki. The operator says it needs connections faster than 2 megabits per second (E1s) to handle large data transfers and business video services. Qwest has two VDSL trials with 50,000 residents. "We see substantially reduced churn and higher ARPU. We're getting a large share of wallet," said Coles. But the carrier has not committed to a commercial deployment due to regulatory and financial uncertainties. U.S. incumbent operators want the FCC to eliminate unbundling requirements on high-speed data equipment, such as ADSL and VDSL. They claim this would bring telco regulation in line with open access regulations for cable operators. The FCC is due to decide on this issue by the end of the year. (c) Communications Week International for more information about Communications Week International call +44 171 388 2430 or go to http://www.emap.com on the Internet Copyright 2002 EMAP Computing Ltd. COMMUNICATIONS WEEK INTERNATIONAL 15/07/2002 P14 Email this article to a colleague Information provider: Peter Woolf Publication date: 23/04/2001