Cost effective DSL
by Lesley Hansen

The Internet access market is becoming a utility market. Prices for Customer Premises Equipment (CPE) are based on commodity product pricing. Digital Subscriber Line (DSL) services are beginning to be seen by the consumer as a utility service in the same light as the telephone, electricity or gas network. Customers are not prepared to pay a premium for what they perceive as a utility service. In this environment the drive to reduce the Total Cost of Ownership (TCO) of the network increases in importance, as it becomes a significant factor in the difference between a profitable and non-profitable DSL deployment.

In a utility market a key issue for the service provider is the payback period for DSL deployment. Early DSL deployments based on ATM architectures had typical payback periods of 4–8 years. These payback periods are unacceptable

in today’s climate with funding hard to secure and the need to make investments work and secure income as soon as possible after deployment.

Upfront Equipment Costs

Before providers can offer a service to customers they need to have purchased and installed the hardware to attach to their backbone network. Equipment costs for a traditional Asynchronous Transfer Mode (ATM) DSL solution and for an Ethernet based IP DSL solution on a price per port basis are similar. But the total cost of ownership and the upfront equipment costs including the backhaul interface are 30–50% lower in an Ethernet based IP DSL solution. This saving in upfront equipment costs is primarily because of the price of the backhaul interface and switch connection.

Rollout Costs

Roll out with its associated visits to the customer premises makes up more than 10% of the cost of deploying and maintaining a DSL network. ATM based DSL deployments today still require an average of 2.8 visits per customer. At a cost of around $150 per visit this is a substantial cost to the provider.

In order to rollout cost effectively the CPE equipment needs to be kept as simple and easy to deploy as possible. A plug and play device that can be delivered by post and that can simply plug into the standard telephone socket is ideal. IP based CPE devices are truly plug and play with no configuration requirements.

Using plug and play features IP DSL solutions can be configured as around one fifth of the cost of provisioning traditional ATM DSL solutions.

Ongoing Support Costs

Good and responsive support is critical as customer loyalty and customer ownership are heavily influenced by the quality of support provided.

The simple nature of an Ethernet based IP DSL solution introduces a series of advantages in the support area. Products are plug and play, this avoids expensive and time consuming phone calls trouble shooting configuration issues. All configuration takes place at the Central Office, avoiding any need to visit the customer premises.

DSLAM ports are manageable using SNMP for trend analysis and fault alerts and web based management software allows easy access to devices from a central point without incurring travel costs.

Focus on Revenue

Access services are in the long term the lowest revenue earning area in the DSL providers network. This is because the network is becoming increasingly a utility item that simply provides the transport to the services that are actually earning revenue for the provider. The customer expects to have low cost if not free access, and therefore the provider needs to supplement revenue per subscriber by supporting services such as web hosting, firewall and security services, service level agreements and guarantees of service for which the customer is willing to pay a premium.

The Results

Initial evaluations of Net to Net Technologies customers indicate that an Ethernet based IP DSL solution can provide a reduction of more than 47% in the total cost of ownership of installing, deploying, provisioning, running and maintaining the network. For further information visit our web site at www.nettonettech.com