Posted: 11/2000
Survey: DSL Wholesalers Get Mixed Reviews
By Judy Reed Smith and Nick Regas
DSL. It was a brilliant idea: Widen the bandwidth spectrum over the same copper wire that telephones already use enabling data and voice data to travel simultaneously at high speeds.
It could not have happened at a better time.
Demand for high-speed Internet access is growing exponentially. In the past few years, government regulations have forced telephone companies to share lines with competitors, opening up opportunities to establish telecommunications networks at little capital cost.
Strategy consulting firm ATLANTIC-ACM Inc. (www.atlantic-acm.com)found the projected number of lines carrying DSL service for 2000 was 2.6 million, but the number projected for 2006 was nearly 60 million with corresponding revenues to hover around $13 billion.
But providers face unique challenges. They must overcome the physical problems of old phone lines and the introduction of new, fiber ones. And because DSL providers are in cooperation with local telephone carriers, providers and consumers must wade through a complicated partnership system to get their needs met.
The result is that many DSL providers have had a hard time providing exactly what they have promised. Some do better than others.
ATLANTIC-ACM surveyed ISPs and, using responses from 92 of them, created a report card on the five leading wholesale DSL providers.
NorthPoint Communications Group Inc. (www.northpoint.net) Covad Communications Co. (www.covad.com) Rhythms NetConnections Inc. (www.rhythms.com) Qwest Communications International Inc. (www.qwest.com) and SBC Communications Inc. (www.sbc.com) were rated for their performance in six categories: provisioning, operations support services (OSS), network, products, pricing and billing.
In addition, respondents ranked the categories by importance. ATLANTIC-ACM weighed each company's score relative to the category's importance. The result is a comprehensive report that rates the companies and highlights the factors that really matter.
Scores
Provisioning and OSS were the most critical areas of DSL service and often the most troublesome. Network, pricing, product and billing followed them respectively in importance to ISPs.
The report was able to pinpoint clear winners among the companies after analyzing the data: Rhythms, which received the highest overall score, was trailed closely by Covad and NorthPoint.
While the ISPs rated internal delivery and timing of provisioning as good, some companies had below average delivery of promised services. And the ISPs were frustrated with ILEC cooperation, though Rhythms showed far stronger cooperation success than the others.
Rhythms also led the pack in this category with a 5.9 score out of 10. The range of scores fell as low as 4.3 for SBC.
Opinions about OSS varied greatly from DSL provider to DSL provider and from service to service. Providers were measured by their responsiveness to ISP problems, pre-qualification search engine, technical expertise, customer interface and e-bonding strength. NorthPoint was rated highest in OSS with a 5.6, Rhythms received a 5.5 and Covad scored 5.3. Again, SBC received the lowest rating: 4.2.
Network reliability varied across the board. ATLANTIC-ACM measured the strength of the provider's network and the strength of the provider's ability to respond when a disaster struck. The top three overall providers scored between 6.3 and 6.2, while Qwest and SBC each scored 5.6.
Pricing was a close contest among the companies, and though most ISPs were generally content with the pricing of asymmetric DSL (ADSL) across the board, they had mixed reviews about symmetric DSL (SDSL), ISDN DSL (IDSL) and high-data-rate DSL (HDSL) pricing.
The range of scores was very close, with Covad taking the lead at 5.9 and NorthPoint bringing up the rear with 5.5.
Respondents rated products and billing above average, but also rated the two categories least important. Rhythms received the highest score of 6.2 while Covad and SBC scored 5.7. Qwest and NorthPoint received 5.3 and 5.1, respectively.
Trends
The DSL market is exploding--a projected market of $1.5 billion in 2000--with the five compared providers leading the charge. DSL service is reliable, relatively inexpensive and allows constant high-speed access to the Internet. And yet, many consumers report poor provisioning because of the complexity of the relationship between the ILEC, the DSL provider, the paperwork jungle and the physical limitations of copper wire engineering. Services cannot be offered to all locations, and as copper phone lines turn to fiber, DSL is shut out. What does this mean for the future of the service?
ATLANTIC-ACM's report details that most ISPs view DSL as an interim solution for the next few years, but during that time it will become cheaper, more accessible, and an important, prosperous sector of the telecommunications industry.
Judy Reed Smith is CEO and Nick Regas is a data analyst for ATLANTIC-ACM Inc. (www.atlantic-acm.com) a Boston-based strategy consulting firm. They can be reached at +1 617 720 3700 or atlantic@atlantic-acm.com.
