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Ikanos Communications, Inc. Message Board

  • tredleon tredleon Jan 16, 2007 7:22 AM Flag

    Where's The Disconnect??

    Between the growth prospects and market dominance as portrayed in the company's investor presentation and the current stock price? One aspect that doesn't make sense to me is that IKAN portrays their VDSL chipset solutions as economically advantageous from a capex point of view, but the article recently posted by dslnerd about Deutsche Telecom's decision to scale back their deployment of VDSL seems to be primarily a capex issue - the estimate for a full rollout of VDSL to all of DT's customers was going to cost $4.3B vs $50M for a ADSL2 rollout, or almost 100-times the cost?? Obviously, the cost difference is not all a chipset issue - what am I missing - what's going on here?? ADSL2 will not give them the ability to provide all the potential offerings that a VDSL system would, but how does a company justify the cost difference?

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    • Most of the CO already have ADSL equipment installed by just by having a small software/hardware upgrades you bring up the bandwidth to ADSL2+ levels.

      VDSL2 you do require installing Central Office equipment. Fiber you require installing cable to premise.

      Problem with Telcos is Cable + Satellite already have HD and ondemand programming.

      It is a question of risk to reward ratio. How many customers will get you billion dollars?
      What is your differentiation?

      • 1 Reply to invest2bfree
      • The risk-reward issue was part of the DT story - they seemed to believe the reward was worth the risk of spending billions on VDSL until the regulatory picture started to shift - some EU authority making noise about suing them to force wholesale access (i.e. cost plus) to their network. So if they wanted to charge $100 month for VDSL service, a competitor could come in and buy wholesale access to their network and undercut them. I can't imagine this is an issue in any of the Asian markets, where most of their business is?

    • Do you know the performance difference between ADSL2 and

      • 1 Reply to best_stock_ever
      • The same article indicates that ADSL2 is capable of providing downstream speeds of 24Mbps, but only for customers within 500 meters of the central office. Based on IKAN's presentation, I believe they are capable of downstream speeds of 100Mbps and upstream of 50 Mbps (their fifth generation chip supposedly does 100 each way). Their presentation focuses on the fact that for HD television or many internet applications that the current generation demands (e.g. viewing video clips, file-sharing, or uploading a file to UTube), you need both downstream and upstream capabilities above 50Mbps to make it reasonably functional?

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