Ikanos Communications (IKAN) – How Big is The Market for VDSL?

 Ikanos is a chip company which specializes in access and media gateways. For the past several years the small company has been the undisputed leader of the VDSL (Very High Speed DSL) market. This market, which originally existed mainly in Japan and Korea, seems to be spreading to the rest of the world, especially to Europe and the US. Although VDSL enables much higher transmission rates, it is still unclear how widely accepted it would become.

  Most carriers on the planet are in various stages of deploying triple play networks, in order to increase their revenue and to fight competition from cable and satellite companies. In order to provide triple-play services which consume much more bandwidth, telcos must upgrade their access networks from ADSL  to architectures where fiber reaches closer to the customer’s premises. There are several architectures that can be used, with the main factor being fiber penetration. The deeper the fiber goes towards the customer’s house, the more bandwidth can be provided. If fiber is deployed all the way to the customer’s home, it is called FTTH (Fiber-to-the-home). FTTH does not utilize traditional copper lines and therefore makes DSL solutions such as VDSL obsolete. Fiber can also be deployed to a basement of an MDU, resulting in FTTB (Fiber-to-the-basement) architecture. This kind of deployment utilizes existing infrastructure, including copper, in order to connect each apartment to the fiber. An architecture where fiber reaches only to a street cabinet is referred to as FTTN (Fiber-to-the-node). In this case, copper is typically used in order to reach the customer’s home. Both FTTN and FTTB typically involve using VDSL for connecting customers to the fiber network.

There is no doubt that FTTH is the superior architecture in terms of performance, maintenance and efficiency. There is also no doubt that eventually telcos will offer FTTH to most of their customers, especially in densely populated areas. However, there are several views in regards to the migration route towards FTTH. Some think the best way to go is upgrading directly to FTTH, while others claim that there should be a gradual migration from current ADSL and dial-up networks that will be done in more than one step, hence, first deploying FTTN/FTTB and then upgrading it to FTTH, somewhere along the road.

The two approached can be demonstrated by Verizon’s and AT&T’s strategies. Verizon decided to go with the FTTH solution for its FiOS service while AT&T is deploying its U-verse based on FTTN. Each company claims that its strategy is superior, pointing out the disadvantages of the other strategy. FTTH, can deliver more bandwidth but it takes more time to be deployed and necessitates laying fiber all the way to the customer’s premises, a task which is challenging and expensive especially in existing buildings. FTTN, on the other hand, is cheaper and characterized by faster time to market, but the bandwidth it can support is limited, at least with current technologies.

 Naturally, real life is more complex and each carrier may deploy a mix of all three topologies in different areas and markets. The crucial factor for Ikanos is the portion of non-FTTH deployments, which consequently defines its addressable market. On the following articles, I will try to go over the 3 geographical markets, Asia, Europe and the US, and analyze IKAN’s prospects in each market.

2 thoughts on “Ikanos Communications (IKAN) – How Big is The Market for VDSL?

  1. Looking forward to the remaining analysis. With respect to AT&T, if they are utilizing FTTH, are they definitely using VDSL the rest of the way. If so, where is the equipment coming from and does IKAN have an opportunity to provide those chips?

    Like

  2. Hi Tim

    As far as I know, AT&T does not utilize FTTH in any of their markets. For now,they stand by their original plans to deploy FTTN/FTTC using VSDL2. Unfortunately for Ikanos, it is not involved in this deployment, which is expected to have a million subs by the end of 2008. The main chip supplier is Conexant.

    Ikanos is involved with two north american carriers, one of them is rumored to be Verizon that will utilize VDSL2 for its FTTB deployments in the east coast.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Ikanos Communications (IKAN) – How Big is The Market for VDSL?

 Ikanos is a chip company which specializes in access and media gateways. For the past several years the small company has been the undisputed leader of the VDSL (Very High Speed DSL) market. This market, which originally existed mainly in Japan and Korea, seems to be spreading to the rest of the world, especially to Europe and the US. Although VDSL enables much higher transmission rates, it is still unclear how widely accepted it would become.

(more…)

2 thoughts on “Ikanos Communications (IKAN) – How Big is The Market for VDSL?

  1. Looking forward to the remaining analysis. With respect to AT&T, if they are utilizing FTTH, are they definitely using VDSL the rest of the way. If so, where is the equipment coming from and does IKAN have an opportunity to provide those chips?

    Like

  2. Hi Tim

    As far as I know, AT&T does not utilize FTTH in any of their markets. For now,they stand by their original plans to deploy FTTN/FTTC using VSDL2. Unfortunately for Ikanos, it is not involved in this deployment, which is expected to have a million subs by the end of 2008. The main chip supplier is Conexant.

    Ikanos is involved with two north american carriers, one of them is rumored to be Verizon that will utilize VDSL2 for its FTTB deployments in the east coast.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s