Ethernet services

Ethernet Expo Begins

9:55 AM -- NEW YORK -- Ethernet Expo 2007 is underway. I've fueled up on coffee and croissants and am sitting in the opening talk, by Heavy Reading analyst Stan Hubbard.

He's upbeat, talking about 2007 being carrier Ethernet's breakout year. Service providers are seeing double-digit annual growth rates -- or, for at least one carrier, even triple-digit "off of a large base of revenues."

But Hubbard also offers this cautionary note:

"As more and more resources pour into Ethernet... we're going to have much, much greater competition in the service provider space. So, while the growth rates are strong, the pressure on margins, I think, is going to increase over time, especially as you have companies that are not selling Ethernet to the same locations now, start to overlap."

The battleground for carriers is going to be at the applications level, not at the connectivity level. Hubbard hints that that's going to be underscored by Rich Klapman, director of product marketing at AT&T Inc. (NYSE: T), in the keynote that comes up at 10:45.

— Craig Matsumoto, West Coast Editor, Light Reading

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