Ikanos Communications – How Big is The VDSL Market -Part III (Europe)

Tuesday, January 8th, 2008

Ikanos (IKAN) sees the European market as the most promising market for 2008, with several carriers evaluating VDSL platforms powered by Ikanos’ technology. There are several factors which make Europe so attractive for Ikanos.

 

First, fiber penetration in Europe is not as deep as in Japan and Korea, where fiber is  typically pushed very close to the customer’s home or building. In Europe, the loop lengths are substantially longer, ranging from several hundreds to several thousands feet, which calls for ADSL2+ and FTTC/N  rather than FTTH/B, assuming that carriers want to minimize capex. Second, European telcos are not pressured by cable operators, as cable companies in Europe are inferior to the large European carriers such as Deutsche Telekom and Telefonica. In the US, cable companies have a very strong position and are planning to fight Verizon’s and AT&T’s triple play offers by massive upgrades, including Docsis 3.0 that can potentially deliver 160Mbps, setting a very high bar. Third, the European market is characterized by strong regulation, which forces carriers to share their infrastructure and provide unbundled access to alternative carriers. This has led numerous carriers to a direct clash with the EU regulatory body regarding network unbundling and the feasibility of network upgrades in light of existing policies. The most familiar of these clashes is DT’s  dispute with the  European Commission (EC) about its VDSL buildout. DT refuses to provide alternative service providers such as Hansenet and Arcor access to its VDSL network despite harsh criticism and threats from the EC. Fourth, Ikanos has a very strong partnership with Alcatel–Lucent (ALU), the most dominant access vendor in Europe.  Ikanos expects most of its future sales in Europe to be derived from the partnership with Alcatel, who is currently shipping its VDSL systems based on Ikanos’ chipset to 3 customers, with additional 4-5 carriers who are in field trials. Ikanos has particularly high hopes for Alcatel’s 48-port VDSL2 line card, which was launched in the first half of 2007.

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Ikanos Communications - How Big is The VDSL Market ? – part II (Japan)

Wednesday, December 12th, 2007

Japan is considered as one of the most advanced telecom markets in the world, especially in terms of average bandwidth allocated per each subscriber. Although there are many European countries with higher broadband penetration, subscribers in these countries can get up to several Mbps, while the standard in Japan is at least several tens of Mbps. This is thanks to years of infrastructure buildout mainly by the country’s leading incumbent, NTT, which has deployed a massive fiber network that covers the majority of population in Japan. The high fiber penetration and population density made Japan Ikanos’ (IKAN) largest market. Accounting for more than 35% of the market, there were more than 10 million FTTH subscribers in Japan in mid 2007, with the remaining of the broadband market dominated by DSL. During recent years, there is a clear trend among Japanese subscribers who migrate from DSL services (mainly ADSL) toward FTTH services. In fact, the number of FTTH subscribers is expected to surpass the number of DSL subscribers somewhere in 2008. In Q1 of 2007, for instance, more than 800k subscribers signed up for FTTH services, in contrast to a 200k drop in the number of DSL subs.

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