May 10, 2004 2:05 PM PDT

Nortel: Video demand to spur faster DSL

Competition from cable companies means that rival fixed-line telephone companies will soon be forced to offer significantly faster digital subscriber line services than are on the market today, according to Nortel Network's chief technical officer.

Speaking in London on Monday, Nortel's Greg Mumford predicted that broadband services would grow significantly faster over the next few years, as pressure grows from users demanding more innovative features.

"Wire-line providers will look to protect themselves from cable companies who offer video services, which will mean DSL speeds will rise to 20 megabits per second," predicted Mumford at an event launching Nortel's new multiservice provider edge (MPE) range of routers.

"In the U.S., wire-line providers who don't have a video component to their network are working really hard to bring video to the table," Mumford added.

Cable companies have a significant advantage over more-established telephone companies: They can offer a wider range of services down their network. For example in Britain, NTL and Telewest both sell a 'triple-play' of telephony, television and Internet access to their customers, while BT's existing retail services are restricted to just running phone and Internet services over its copper network. In the United States, Comcast and Time Warner Cable have been very successful in selling triple-play services, which has helped them achieve a lead in broadband in that market.

At present, most cable companies use only a small part of their overall bandwidth for broadband--most of their capacity is used for broadcasting. They would need to redesign their infrastructure, if they wanted to support true video-on-demand.

Graeme Wearden of ZDNet UK reported from London.

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20 Megabit?
20 Megabit line for a home user? /drool
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