IP: ADSL Forecast (as sent to a visitor at UPenn DSL Lab)

[Dave Farber <farber () central cis upenn edu>]

Date: Wed, 14 Aug 1996 23:50:52 -0400
From: KimMaxwell () aol com
To: vava () aurora cis upenn edu
Cc: lsmith () adsl com
Subject: ADSL Forecast


Mr. Baba,


The Forum as such does not publish market research, and I am afraid that no
one else does either at the moment (other than a rather mechanical effort by
Dataquest).  
However, I can offer (from my perch at Independent Editions) some thoughts
and figures.   It is well understood now (and is reflected in Forum work)
that PC applications will dominate the next five years of telecommunications
advances into broadband communications.   The market therefore will be
bounded by the number of PC households and small businesses that will be
attracted to megabit access speeds.  PC households today number about 50
million (worldwide), and a figure of 100 million by the end of 2000 is not
farfetched.  Of those, one can expect 70% will have communications (the
present ratio).   As most of these households fit within the most affluent
homes, it would not be unreasonable to expect a high percentage to want, and
be able to afford, megabit access rates if the price were, say, below $40 per
month (in addition to other service charges).  I estimate 30%, or more than
20 million by the end of 2000.   My estimate is based in part on the
extraordinary growth of data modems over the last few years, from 2 million
per year to more than 20 million per year now.
   The big question then becomes one of Network Provider performance -- can
telephone companies deploy access networks fast enough to meet this kind of
demand at this kind of price.  I think the answer is yes.  Unlike ISDN, ADSL
access networks will be completely separate, and can be installed as fast as
manufacturers can make them (something which is not true of any new network
requiring new loop infrastructure, such as FTTN, FFTC, or HFC).   Recent
events suggest that the will to do this (it means breaking a few rules) is
growing to critical mass among telephone companies in the U.S., and the rest
of the world will follow.


I hope this at least puts one perspective on the subject. 


Regards


Kim Maxwell
Chairman, ADSL Forum
President, Independent Editions.