August 28, 1996
Millions of people are expected to rush to buy a futuristic new technology that can provide them with ultra-fast connections to the Internet, according to a new report.
The online technology known as xDSL (DSL stands for digital subscriber line and x stands for x-factor). Communications hardware using xDSL technology can transform ordinary telephone lines into high bandwidth connections that can handle large amounts of digital traffic through online networks.
"xDSL will provide the high-speed 'last-mile' pipe to the home," said Lisa Pelgrim, an analyst with Dataquest Inc., which produced the study.
People will be able to use high-speed xDSL connections for Internet access, online services, telecommuting, videoconferencing, video phones, interactive gaming and video hookups between students and a teacher at another location, Pelgrim said.
"This will create more opportunities for videoconferencing," said Ira Machefsky, an analyst with Giga Information Group. "You'll be able talk to your mother over the PC and see her on your screen."
The market for these new services should grow dramatically between now and the year 2000, the Dataquest report shows.
About 50,000 units of xDSL equipment are expected to be shipped this year, but that number should grow to 510,000 in 1997 and 12.5 million in 2000, the report estimated.
The xDSL market, which is projected to generate $50 million in sales this year, should swell to $2.5 billion by the year 2000, according to the study.
"Users are craving more speed as their data demands increase, making them more than ready for low-cost, high-speed services.," Pelgrim said.
A number of telephone companies, including Pacific Bell, are making exactly that bet. Pac Bell has launched field tests in San Ramon of the xDSL technology and could move to a commercial deployment in 1997.
Telephone companies hope to deploy xDSL as its primary weapon in the coming war against the cable TV industry's cable modem technology.
Cable operators intend to roll out cable modems in increasing numbers over the next few years. Cable modems let people use a cable TV network to hook up a PC to the Internet and obtain information at lightning-quick speeds.
"We recognize there is a growing demand by our customers for faster Internet than conventional dial-up modems can provide," said Craig Watts, Pacific Bell spokesman. "The cable industry is racing to meet that need and we would like to get those customers first."