Voice over DSL

Convergence where it
counts.
Jeff Jenkins
Jetstream Communications
IEEE - Bay Area Chapter Meeting
June 9, 1999

What the analysts say:

"In my opinion, and not to be
melodramatic here, it is the most
important trend in the industry in the
past 10 years, the coming together of
voice and data networks"
--Jonathan Haller, principal analyst covering network
services for market researcher Current Analysis Inc.,
(Sterling, Va.).

Agenda

The True DSL Opportunity

CLEC Implications
ILEC Implications
Subscribers Benefits

Yesterdays DSL
Opportunity
Data
Rev./Year
$4.2B

Small
Business

7.4M

Internet
Access
61%

Home Office/
Res.

104M

25%

$4.7B

111.4M

31M

$8.9B

Total
Est.

Total

DSL is ideally suited for delivering data

services to this market...
Source: IDC

Today's DSL
Opportunity
Data
Rev./Year
$4.2B

Voice
Rev./Year

Small
Business

7.4M

Internet
Access
61%

Home Office/
Res.

104M

25%

$4.7B

$35B

111.4M

31M

$8.9B

$65B

Total
Est.

Total

$30B

and DSL is ideal for delivering Voice as well!

Source: IDC

Small Business: Voice vs.

Data
Average Annual Small Business
The typical small business
spent $6,645 on voice
services and $568 on data
in 1998
By 2002, data will
represent nearly 10% of
total landline
expenditures. 90% of
expenditures are on voice!

Landline Expenditure per Business

$10,000
$9,000
$8,000
$7,000
$6,000

Voice
Data

$5,000
$4,000
$3,000
$2,000
$1,000
$0

Source: IDC, January 1999

1997 1998 1999 2000 2001 2002

DSL Access Network

PSTN
xDSL

Phone
System

LAN

DSL
Rtr.

Subscriber

Regional
Packet
Network

Class 5

Internet

DSLAM

ISP Facilities

ILEC
Wire Center

Regional
Switching Center

Voice over DSL

Voice Gateway
303

Phone
System

LAN IAD

Subscriber

xDSL

Regional
Packet
Network

PSTN

OC3
DS3/

Class 5

Internet

DSLAM

ISP Facilities

ILEC
Wire Center

Regional
Switching Center

Integrated Access Device

(IAD)
Multiplexes multiple telephone lines
and data onto single DSL circuit
(single copper pair)
Supplied by Jetstream, FlowPoint,
Efficient, Ramp, Netopia,...

Voice over DSL

Voice Gateway
303

Phone
System

LAN IAD

Subscriber

xDSL

Regional
Packet
Network

PSTN

OC3
DS3/

Class 5

Internet

DSLAM

ISP Facilities

ILEC
Wire Center

Regional
Switching Center

DSL Access Multiplexer

(DSLAM)
Multiplexes multiple subscribers
onto a single back-haul facility
Supplied by Nokia, Alcatel, Cisco,
Copper Mountain, Nortel,...

Voice over DSL

Voice Gateway
303

Phone
System

LAN IAD

Subscriber

xDSL

Regional
Packet
Network

PSTN

OC3
DS3/

Class 5

Internet

DSLAM

ISP Facilities

ILEC
Wire Center

Regional
Switching Center
Voice Gateway
(CPX-1000)
Integrates subscriber voice traffic
into Class 5 local switch
Supplied by

Voice over DSL

Voice Gateway
303

Phone
System

LAN IAD

Subscriber

xDSL

Regional
Packet
Network

PSTN

OC3
DS3/

Class 5

Internet

DSLAM

ISP Facilities

ILEC
Wire Center

Regional
Switching Center

A carrier can deliver up to 16 telephone lines

and data service over a single copper pair

VoDSL Advantages:

Dynamic Bandwidth Allocation

700

Average bandwidth available for data

Bandwidth (K)

600
500
400
300
200
100
0
7am

Average bandwidth used by telephony

8am

9am

8 lines serving 32 extensions at

P.01 over a 768kbps SDSL line

10am 11am 12pm

1pm

2pm

3pm

4pm

5pm

Dynamic Bandwidth
Available Bandwidth during Busy Hour

On a fully utilized 768 SDSL line...

80% of bandwidth avail. 50% of the time
50% of bandwidth avail. 90% of the time

The CLEC VoDSL

Opportunity
To extend the reach of their already
successful voice and data bundling
strategy to the next big markets...

Small Business, Home Office &

High-end Residential

The CLEC VoDSL

Opportunity

which is also a significantly

larger voice opportunity

Small Bus, HO and

High-end Residential

Large Business

$88B

Source: IDC

$34B

The Current CLEC

Opportunity

Run T1/T3s over Fiber,

WLL, or Leased from ILEC

Phone System
Router

PSTN
Voice Switch

Internet
Data Switch
Phone System
Router

Large/Mid-Size
Businesses

CLEC Regional
Switching Center

The Current CLEC

Opportunity

Run T1/T3s over Fiber,

WLL, or Leased from ILEC

Phone System

Cost of current
TDM technology
only permits
profitable service
delivery to
subscribers with
14 or more
telephone lines

Router

PSTN
Voice Switch

Internet
Data Switch
Phone System
Router

Large/Mid-Size
Businesses

CLEC Regional
Switching Center

The Current CLEC

Opportunity

Run T1/T3s over Fiber,

WLL, or Leased from ILEC

Phone System

95% of Small
Businesses and 99%
+ of Residences use
12 or fewer
telephone lines!

Router

PSTN
Voice Switch

Internet
Data Switch
Phone System
Router

Large/Mid-Size
Businesses

CLEC Regional
Switching Center

The CLEC Challenge

Finding a cost-effective access
network architecture that leverages
the last mile copper network

Phone
System

LAN

Phone
System

PSTN

LAN

Voice Switch

Internet

Phone
System

Data Switch

LAN

CLEC Regional
Switching Center
Phone
System

LAN

Small Businesses
& Residences

ILEC
Wire Center

Deploying a single multi-service

network that efficiently scales to
deliver both VOICE and DATA.

VoDSL Access Network

xDS
L

Phone
System

LAN

IAD

DS
-3
DSLAM

Phone
System

LAN

/O
C

IAD

303

Regional
Packet
Network

PSTN
Class 5

Internet

Phone
System

LAN

Voice Gateway

-3

ISP Facilities

IAD

Regional
Switching Center
Phone
System

LAN

DSLAM
IAD

Small Businesses
& Residences

ILEC
Wire Center

VoDSL Benefits to
CLECs

Successfully penetrate the small business,

home office and high-end residential markets

Solves the economic and operational challenges

Single network for voice and data - On Net

Single copper pair
Requires only a DSLAM in CO
Single back-haul facility

Solves the marketing challenges

Increases customer acquisition and retention through
bundled voice and data services

The ILEC VoDSL

Opportunity

Overcome Copper Exhaust Challenges

ILEC Copper Exhaust

Phone
System

Number of additional
lines increasing

LAN

PSTN
Voice
Switch

Phone
System
LAN

Small Businesses
& Residences

ILEC CO

ILEC Copper Exhaust

Phone
System

New copper-based
services - DSL

LAN

PSTN
Voice
Switch

Internet
Phone
System
LAN

Small Businesses
& Residences

DSLAM

Data
Switch

ILEC CO

ILEC Copper Exhaust

Phone
System

New copper-based
services - DSL

LAN

PSTN
Voice
Switch

Internet
Phone
System
LAN

Small Businesses
& Residences

DSLAM

Data
Switch

ILEC CO

ILEC Copper Exhaust

Where DSL is deployed...
Phone
System
LAN

IAD

Voice Gateway

PSTN
Voice
Switch

Internet
Phone
System
LAN

DSLAM

IAD

Small Businesses
& Residences

Data
Switch

ILEC CO

utilize VoDSL to
overcome exhaust

VoDSL Benefits to ILECs

Overcome copper exhaust
Generate additional voice and data revenue
Drive more lines through bundling

Faster return on DSL investment

Entrench customers before competition does

Subscriber Benefits

One-stop shopping for voice & data

Consolidated billing
Competitive, compelling service offerings

Bundled data if you switch dial-tone provider

Discounted telephone service
Bundled local and long distance

In Summary
DSL is not just for data anymore

Its about bundled services.

Data sells and voice pays. Not the other way around.
If in two years youre only in the voice business or only in
the data business, you should be nervous.

VoDSL is a Win-Win-Win

Carriers: Access to new markets and generate more $$$.

Subscribers: Receive compelling new services.
DSL equipment suppliers: DSL deployments increase.

xDSL Forecasts
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
1998

1999

2000

2001

2002

Current adoption estimates based on customer willingness

to pay premium for faster data. An isolated data decision.
What if it were based on customers with at least a few
phone lines that could use higher speed data?

The Leader
in
Voice over DSL
Jeff Jenkins
(408) 399-1300
jjenkins@jetstream.com
www.jetstream.com