Today, metro Ethernet equipment startup Atrica Inc., announced a deal with Isis, a regional carrier in Germany. The contract isn’t huge from a financial perspective, but it's another sign of the growing metro optical Ethernet movement.

Atrica will be the exclusive supplier of Ethernet switching gear to Isis, says Burkhard Schram, product manager at Isis. The company beat out Cisco Systems Inc. (Nasdaq: CSCO), Extreme Networks Inc. (Nasdaq: EXTR), Foundry Networks Inc. (Nasdaq: FDRY) and Nortel Networks Corp. (NYSE/Toronto: NT) for the contract, says Schramm.

Atrica has already announced deployments with France Telecom SA (NYSE: FTE), Al-Pi Telecomunicacions in Spain, Hokkaido Telecom Network (HOTnet) in Japan, and Broighter Networks Ltd. in Ireland (see Atrica Plugs Into France Telecom, Optimising Cost Control & Profitability in Telecoms, and Atrica Supplies Irish).

Financial details weren’t available, but Schramm says Atrica’s switches will be deployed throughout its 1,200km fiber optic network. The carrier's footprint encompasses 10 cities, including Düsseldorf. ISIS services about 65,000 customers. Schram says the network will be expanded over the next three years as demand for Ethernet services grows.

While the Isis network pales in comparison to other planned Ethernet networks, like the one Reliance Infocomm Ltd. is building, it does show the growing interest among small carriers to deploy optical Ethernet rather than deploying Ethernet over Sonet/SDH. Reliance is building a nationwide Ethernet network in India (see Monster Metro Ethernet Project Unveiled). Atrica is rumored to be supplying Reliance with gear (see Atrica Closes in on Indian Deal).

“Until optical Ethernet deployments hit critical mass, even small wins are significant,” says Geoff Bennett, chief technologist for Heavy Reading, the new market research division of Light Reading Inc.There’s no question that carriers are already deploying Ethernet. Customers like the flexibility of the service and the ease of the interface, say experts. Now the question is which technology will be chosen for the transport. Will it be optical Ethernet using devices from vendors like Atrica, or will carriers use next-generation Sonet/SDH gear to offer Ethernet over their standing Sonet/SDH infrastructures?

Bennett says it’s too early to tell which technology will win the war, but he says that small battles are being fought and won on either side with every carrier deployment.

“Sonet has lost the initial battle to prevent Ethernet gaining a toe hold in the access link,” he says. “The next battle is over transport, and right now Sonet/SDH has a major advantage.”

Ultimately, carriers will decide based upon cost. While many people argue that pure Ethernet services are cheaper to deploy, the reality is that, in some instances, Sonet/SDH deployments are more cost effective.

Deutsche Telekom AG (NYSE: DT), which has an extensive SDH network, uses gear from Lucent Technologies Inc. (NYSE: LU) to leverage its legacy network to deliver Ethernet services (see Lucent Scores Big in Europe).

Isis, which also has SDH deployed, explored this approach as well, says Schramm. But he says it was cheaper to build a brand new optical Ethernet backbone than use its existing Sonet/SDH network.

“It really depends on the carrier,” says Bennett. “Factors like geography, customer density, the load on the network, and many others, all determine which transport mode is most cost effective.”

— Marguerite Reardon, Senior Editor, Light Reading