The world’s largest telecommunications equipment vendor has shocked many in the industry by deciding to exit the market for DSLAMs, forcing some carriers to look for an alternative vendor. While no official announcement has been made, CommsDay has learned from service providers in both New Zealand and Australia that Ericsson would be discontinuing production of new DSLAMs later this year across its entire product family.
While vendors including market leaders Alcatel Lucent and Huawei have a much bigger share of the DSLAM market globally, Ericsson has been an important supplier of the equipment in Australia, particularly in the networks of iiNet and its new subsidiary Internode. However, globally and in Australia the market for DSLAMs has begun to slow markedly as service providers turn to fibre equipment. Research firm Ovum said recently that DSL growth had slowed or turned negative in some countries, with DSL links replaced by FTTB or FTTH connections. In contrast, the market for PON equipment has grown rapidly, particularly in China.
Internode MD Simon Hackett told CommsDay that both his company and parent company iiNet had been informed of Ericsson’s decision to exit the market for DSLAM gear and said the two companies have a variety of alternative vendors if they require more DSLAM ports. However, he also noted that it may not be necessary to source more ports as it moves to the NBN. A number of carriers in Australia including the likes of Optus and NEC wholesale provider Nextep have recently indicated that they would be unlikely to invest in more DSL in future.
The decision by the Australian Competition and Consumer Commission to declare wholesale DSL services is also seen by many in the industry as making further DSLAM investments unlikely. Internode and iiNet had previously announced that they were moving towards combining their DSL infrastructure and Hackett said that the companies are currently determining how large their final order for Ericsson DSLAM hardware will be to cover current expansion and contingency needs.
“We expect that order will cover our requirements until some point in mid 2013,” he said. “We have a variety of alternative DSLAM vendors if we reach a point beyond that time where we require more DSLAM ports and where Ericsson are no longer in a position to supply them,” he said, adding that the move to the NBN could make that unnecessary. “As copper line networks start to become progressively decommissioned in favour of the NBN, we expect to reach a point where we are shutting down and removing DSLAM ports in NBN-enabled areas at a rate higher than the rate at which we require additional DSLAM port installations in non-NBN-enable areas,” Hackett said.
South Australian ISP Adam Internet also uses Ericsson DSLAMs, however the country’s largest telco, Telstra, uses Alcatel Lucent and NEC as its primary vendors, while both Optus and TPG are also not Ericsson customers for DSLAM gear.
CommsDay was waiting for official confirmation of the move from Ericsson headquarters in Sweden but had not received information by press time.