Jetstream flop stirs VoDSL doubt

The recent demise of voice-over-DSL equipment provider Jetstream Communications Inc. raises questions about the future of voice-over-DSL technology.

Jetstream was the leading voice-over-DSL gateway manufacturer, accounting for almost one-third of voice-over-DSL gateway revenue in the first half of 2001.

While voice over DSL certainly hasn’t taken off like proponents anticipated it would, the technology isn’t dead, said Matthew Davis, an analyst with the Yankee Group.

But the ATM-based voice-over-DSL gear produced by leading voice-over-DSL equipment manufacturers may not have a long life span, Davis said. Voice over DSL over ATM works by reserving some channels for voice, while saving others for data. On a T-1 line 12 channels could be dedicated to voice and the other 12 to data.

Jetstream manufactured voice-over-DSL gateways that converted digitized voice to conventional voice so voice-over-DSL voice calls could travel over the traditional telephone network.

“The thinking was that the [U.S. regional Bell operating companies] had ATM networks that weren’t very old and they had Class-5 switches they weren’t going to throw away, so they’d invest in ATM-based [voice over DSL],” Davis said. “I think the window for that technology started to close last year when the [incumbent local exchange carriers’] capital expenditures went down.”

But ultimately, Davis said he thinks the ILECs will be interested in voice-over-DSL equipment that relies on IP packet transport, instead of circuit-switched ATM. Voice-over-DSL equipment vendors such as CopperCom Inc., General Bandwidth Inc. and TollBridge Technologies Inc. have made strides toward migrating to packet technology, Davis said. But Jetstream wasn’t as well prepared for the migration to packet.

Martin Taylor, the CTO of CopperCom, said it’s unlikely the ILECs will be interested in voice over DSL soon.

“The market is certainly nowhere near where we expected it to be two years ago,” he said.

Taylor said the ILECs saw voice over DSL as a tool that could be used to combat the integrated voice/data offerings of competitive providers.

“Now obviously, the [CLECs’] threat has largely receded in the eyes of the ILECs,” he said.

Cable companies also have been slower than expected to enter the voice-over-cable market, delaying another potential threat to the ILECs, he added.

While the large ILECs may not be interested in voice over DSL now, Taylor notes there are a number of CLECs still selling voice-over-DSL service, with several smaller regional incumbent providers.

Broadview Networks Holdings Inc., a New York competitive provider, has introduced voice over DSL in four markets. And Network Telephone Corp., a provider based in Pensacola, Fla., has rolled out voice over DSL to several markets in the southeastern U.S. Network Telephone, which was a Jetstream partner, plans to continue rolling out voice-over-broadband services, even though Jetstream is no longer in business, said COO Vincent Oddo.

Oddo said Jetstream is offering maintenance support for at least the next 30 days, and Network Telephone has received several offers from other voice-over-DSL vendors interested in the provider’s business.

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