DSL Deployment Surges Well Beyond Projections; Grows 5 Times Faster Than Cable in 6-Month Period.

BOSTON--(BUSINESS WIRE)--August 16, 1999--

Installation of Digital Subscriber Lines (DSLs) grew 300 percent in the United States for the first half of 1999, surging well beyond industry analysts' projections, according to data just released by TeleChoice, Inc. During the same timeframe, cable modem installations grew at the much slower pace of 60 percent, based on 800,000 cable modems in service in the U.S. reported by industry analysts in July 1999.

TeleChoice, a telecommunications management consultancy that closely tracks the broadband access industry, releases DSL deployment statistics on a quarterly basis. The company has tracked actual deployment numbers for nearly two years. Its analysis is available at http://www.xdsl.com/content/resources/deployment_info.asp, which also may be reached through the company's home page at www.telechoice.com.

DSL modem technology, which permits ultra-fast, constant access to the Internet over ordinary copper telephone lines, is the prime competitive threat to high-speed cable modem Internet connections.

Deployment of lines in service in the U.S. grew to 159,150 by the end of the second quarter 1999, more than tripling since fourth quarter 1998 and more than doubling since first quarter 1999. With about two years in the marketplace, cable service has a good six-month lead on DSL and recently reached the million mark, with 800,000 lines in the U.S., according to industry reports.

"Putting this into the perspective of head-to-head competition, while cable modem service maintains a healthy lead, DSL is growing at a significantly faster pace and catching up rapidly," said Laurie Falconer, DSL analyst at TeleChoice. "It may mean the technology has found its legs and is poised to reach its expected exponential market growth much sooner than most believed six months ago.

"Until recently, the focus of the LECs (Local Exchange Companies) had been on deployment of Central Office (CO) equipment," Falconer continued. "Now that most of the major markets have DSL deployed in the COs, the market can grow very quickly. Of the 22,000 COs in the U.S., 3,742 are now deployed with DSL equipment, and they include the 600 to 700 COs that generate most of the business."

The family of DSL technologies, which typically is denoted as xDSL and includes DSL, ADSL, SDSL, and VDSL, employs digital coding techniques to squeeze up to 99 percent more capacity from a phone line. The technology uses the line's higher frequencies to transmit data, leaving lower frequencies free to simultaneously transmit voice or faxes.

Depending on line conditions, xDSL provides speeds of up to 8 Mbps (up to 52 Mbps with VDSL) downstream (to the user) and up to 1 Mbps upstream (up to 2.3 Mbps for VDSL)--up to 30 times faster than the best analog modems, which top out at 56 Kbps. High transmission speed is considered crucial to such Internet applications as interactive multimedia, multi-player gaming, video on demand and video catalogs.

About TeleChoice:

TeleChoice provides business and market strategy consulting to the telecommunications industry worldwide. Applying hands-on experience and user insight, TeleChoice helps clients enter promising markets and expand existing ones, so they gain market presence faster, attain profitability sooner and build sustainable competitive advantage.