A big buy of DSL equipment on the part of Telus Corp. suggests the company is ready to atone for past tardiness with high-speed Internet services, according to one industry analyst.
Alcatel Canada, the national arm of global high-speed equipment builder Alcatel, announced Jan. 23 a deal to sell $250 million worth of DSL equipment to Telus. Geoff Cowan, Alcatel Canada’s executive vice-president of sales, said Telus plans to expand its broadband data network with the new equipment. The purchase includes Alcatel’s Asymmetric digital Subscriber line Access Manager (ASAM), a box that conducts traffic between the local copper loop and a carrier’s trunk lines.
“I think the focus that Telus is bringing is, it’s not just DSL,” Cowan said of the agreement. “It’s access, DSL as an enabler for multiple next-generation services like voice, video and data all on the link.”
Joe Greene, vice-president of telecommunications and Internet research with IDC Canada, said Telus is playing an expensive game of catch-up with other high-speed providers.
“They have been a little bit slower than many of the other telephone companies to introduce high-speed Internet services,” Greene said. “This is obviously a move to shore up and introduce in a timelier fashion high-speed Internet services.”
Girish Pathak, Telus’s CTO, said Telus competes primarily with cable companies in the West (Alberta and B.C.) The big buy represents an expanded network both there and in its eastern space, Ontario and Quebec.
Particularly in the West, “cable companies do have a leg up at the moment over telecom and, in this case, over Telus,” Pathak said. ” We have to catch up, if you will, and provide a competitive offering.”
But Cowan said the deal paints a bigger picture than either Telus’s or Alcatel’s market share prospects. Indeed, it also acts as “an early market indicator” that Canadians are bullish about broadband.
“If you leave the quantitative out, I’d say it really highlights the commitment to the health of the broadband access marketplace,” he said, adding that Canada is second only to South Korea in terms of the number of homes with high-speed Internet access.
Canada’s situation is quite different from that of the U.S., Cowan said. South of the border, incumbent local exchange carriers (ILECs) face a unique competitive landscape, in that they face so little competition from other technologies.
“I think the cable companies are a significant threat up here,” he said. Compared to the U.S., Canada presents a battleground of competing technologies, a t