US WEST said recently its MegaBit DSL high-speed Internet service, launched in May 1998, grew at a rate of more than 250 percent during the first half of 1999.
The interest and growth in DSL service has caught the attention of Jato Communications Corp., which announced Wednesday it will compete with US WEST for DSL customers in the Salt Lake area.DSL customers can connect corporate computers, or connect to the Internet, at many times the speed of connections made using traditional dial-up modems.
Like many of the competitors US WEST has for local phone service, Jato plans to add its switching and routing hardware to existing US WEST offices and deliver its DSL service through the copper telecommunications network already in place.
Jato is a 1-year-old company with headquarters in Denver. DSL is its only product, said western division president Keith Bennett.
Jato launched DSL service in Denver on June 15, and Salt Lake City is the company's second market. Albuquerque is Jato's next planned launch, followed by a number of metropolitan areas that fall outside the top-tier markets like New York City, Chicago and Los Angeles.
"We're not going to New York or Los Angeles," Bennett said. Jato sees second- and third-tier markets as its best growth opportunity.
Bennett said Jato plans to market its DSL service differently than US WEST has in the Salt Lake area. Jato sees US WEST as emphasizing home users in its service plans that range from $40 to $80 per month. Jato will focus its marketing on business applications with service packages ranging from $85 per month for business-to-business connections to $140 per month for services bundled with Internet service.
A marketing force will concentrate on specialized segments of the business community in the Salt Lake area first. Bennett said Jato hopes to have service available in most areas along the Wasatch Front by February.
Jato opened an office in the Key Bank building Tuesday and is taking orders immediately, with service expected to begin in several weeks. Customers ordering before Sept. 30 will receive a free modem.
Jato has raised more than $20 million in venture capital to launch its DSL service. The company is also supported by a $50 million agreement with Lucent Technologies, which is providing Jato with access and data networking products, as well as installation, monitoring, network maintenance and financing.