SDSL: Step forward or back for broadband?

SDSL may be the new kid on the broadband block but so far it hasn't exactly stunned the public or even attracted much attention. The cacophony of hype usually reserved for a new technology has been conspicuously absent - a fact that has got some people asking difficult questions about return on investment, hidden costs and availability.

But first of all, what exactly is SDSL and why is it important? SDSL stands for symmetric digital subscriber line and it is being targeted predominantly at small- to medium-sized enterprises (SMEs).

It differs in several ways from its better known cousin, ADSL (asymmetric digital subscriber line), which is chiefly meant to be a residential offering. ADSL provides high-speed bandwidth if users are downloading data but not if they are uploading it. For example, a typical download speed might be 2Mb per second, while upload speeds will come in at a mere 256Kbps.

Moreover, ADSL has a 20:1 contention rate, which means that customers share the line with either 19 others. As a result, it is theoretically possible that if everyone used the line at the same time, data speeds could plummet to 100,000Kbps for downloading and 1,280Kbps for uploading -- not that much more than the average 56Kbps modem.

Up and down
SDSL, on the other hand, has the same upload and download speeds, which currently range between 500Kbps and 2Mbps. It also boasts contention rates of only 10:1, which means that service is better because users share a line with only nine others.

Another advantage for business customers is that, depending on the vendor, SDSL comes with service level agreements (SLAs). These SLAs guarantee certain levels of availability and reliability and if service falls below what is promised, service credits are provided as compensation.

BT, a U.K. provider, for example, which launched its service in January, pledges a four-hour response time and a 24-hour fix time and will deduct charges from customers' bills if it fails to meet these standards.

Business replacement for ADSL
SDSL is really being positioned as a business replacement for ADSL and ISDN. It is aimed at those organisations that require high bandwidth but are unable to afford either dedicated, expensive leased lines or frame-relay services, which are currently only the remit of large enterprises.

Chris Lindsay, BT's new broadband propositions manager, explains: "SDSL is the next step along for businesses. It's almost a stepping stone to the big boy stuff. BTnet [leased lines] provides industrial-strength connections for those that can afford to go there, but SDSL is aimed at smaller companies where the amount of information going out and coming in is already meeting the restrictions of ADSL."

While not every SME will find that they need to switch immediately, SDSL is seen as particularly suitable for those organisations that need to move large files or videos around quickly, such as those in the media, design, print, legal or pharmaceutical industries, according to Clive Longbottom, service director at analyst firm Quocirca.

Despite the expense involved in paying to use a phone line, many organisations continue to use ISDN because of its fast upload speeds.

The technology is also appealing to firms undertaking a lot of videoconferencing because it prevents choppy images at the other end and it could become popular among organisations that need to link disparate sites, stores or warehouses. Running a virtual private network over an SDSL line is anticipated to be almost as secure as, but much cheaper than, its leased line equivalent.

Another expected application, no matter what the size of company, is backing up files remotely rather than having to manually take tapes and other media offsite to store them.

But despite the fact that SDSL technology has been around for several years, it is precisely this appeal to large corporates in terms of potential cost savings that has led to the incumbent telecoms players dragging their feet in introducing it.

Big telcos dragging their feet
"SDSL is seen as a technology that will cannibalise leased-line revenues in certain areas. Leased lines are very lucrative for the incumbents and SDSL is a lot cheaper, so they've held back a bit," says Caroline Bryan, managing analyst at Datamonitor.

There are undoubted downsides to SDSL for the average SME too, the main one being price. While installing an ADSL connection will set customers back anything from £50 to £250, depending on whether they do it themselves or bring in an engineer, introducing an SDSL line could cost around £950. And despite the fact that SDSL is being positioned as an upgrade, it requires new equipment that can only be installed by an engineer. At the moment, moving from ADSL to SDSL means ripping out the old line completely and replacing it with the new technology.

Moreover, while BT charges £130 per month for a 2Mb ADSL line rental, the equivalent for SDSL is a huge £345, although two other speeds are also available -- a 512Kbps connection costs £170 per month, while a 1Mbps line is £230.

SDSL means new telephone lines
Another negative is that, unlike ADSL, SDSL does not carry voice traffic over the same line so that customers cannot use the phone while surfing the internet. This means that new telephone lines also have to be provisioned, with the resultant additional charges.

As Michael Philpott, Ovum's broadband analyst, points out: "You really have to have a business that can justify spending four times as much money on SDSL as ADSL and we foresee that only a subsection will need it at the moment."

But even if you are prepared to put up with the extra costs and inconvenience of altering your phone systems, the biggest stumbling block is availability, adds Philpott. While small suppliers such as Bulldog and Easynet have been providing SDSL services for more than a year, so far this has been limited to the London area.

BT has broadened coverage to include Coventry, however, and has plans to expand to Manchester, Birmingham, Leeds, Bristol, Edinburgh, Newcastle and Sheffield during the next few years, if demand warrants it.

These limitations mean that, of a total of 3.2 million DSL business connections at the start of this year, only 374,000 were SDSL. These figures should grow to 11.6 million and 3.2 million respectively by the start of 2008, driven mainly by the SME market and the growing adoption of teleworking, according to Ovum's Philpott.

Quocirca's Longbottom, meanwhile, believes that the market will really start "waking up" and taking notice of the technology in the second half of this year. "How rapid uptake is will be based on how quickly exchanges are enabled and what value propositions the vendors put together. It could take a long time because there are so many things that could go wrong. But it only takes one company to get it right for SDSL to become the business-connectivity mechanism of the future and wipe the floor with ISDN and ADSL," he says.