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Ethernet equipment

Nortel on PBT: Today BT, Tomorrow the World!

Nortel Networks Ltd. says its headline-grabbing Ethernet equipment contract win at BT Group plc (NYSE: BT; London: BTA) will be the first of many for its PBT (Provider Backbone Transport) solution. (See Nortel, Siemens Win PBT Deals at BT.)

Philippe Morin, president of Nortel's Metro Ethernet Networks division, told analysts on a conference call today that the BT deal "paves the way for widescale adoption of this technology," and that Nortel "aims to win an unfair share of the PBT market by leveraging our initial deployment with BT," though he didn't go as far as to say what size Nortel believes the PBT market might be worth.

PBT is a new, and not yet standardized, flavor of Ethernet that boasts familiar, Sonet/SDH-like provisioning and management capabilities. Its supporters, particularly Nortel, say it's easier and more cost-effective to manage than MPLS. (See Poll: Opex Gives PBT an Edge, Nortel Launches PBT, and Cisco Tracks PBT Standards Process.)

And Morin is so sure of Nortel's early-mover advantage in the market that he told analysts he expects sales of PBT-enabled equipment to boost Nortel's share of the carrier Ethernet equipment market in the coming year, though he wouldn't say what the five-year engagement with BT might be worth. Nortel's share is currently in the low single digits, he noted.

Stan Hubbard, Heavy Reading senior analyst and walking Ethernet market encyclopedia, confirms Nortel's current lowly status in the market. He says that in the third quarter of 2006, Nortel's carrier Ethernet switch/router market share was 3 percent, level with Siemens Communications Group . Leading the market is Cisco Systems Inc. (Nasdaq: CSCO) with 57 percent, followed by Alcatel-Lucent (NYSE: ALU) with 20 percent and Huawei Technologies Co. Ltd. with 7 percent.

Nortel also expects the carrier Ethernet and optical equipment markets to "blur" during the coming years, with the combined market being worth about $13 billion in 2009, up from a combined $10 billion at present.

And Morin took the opportunity to boast about how carriers view PBT as a cheaper and easier alternative to MPLS in metro networks. He said Nortel has an advantage over other vendors, such as the other BT winner, Siemens, because "we have been working for a while with BT and other carriers that see how MPLS does not provide the scale or simplicity of operations they can achieve with our PBT solution. "We also have a strong Ethernet and optical portfolio, and in network management we are the best in the industry at transport," Morin claims. "We are going to make Ethernet as simple to operate as DS1s." (See BT Likes Nortel's New Ethernet Flavor.)

— Ray Le Maistre, International News Editor, Light Reading

jepovic 12/5/2012 | 3:16:28 PM
re: Nortel on PBT: Today BT, Tomorrow the World! " We are going to make Ethernet as simple to operate as DS1s."

Ouch, that doesn't sound very appealing. Who said PDH / SDH networks are easy to operate? My experience is that they're quite cumbersome, especially if one likes to use SDH features for diversity.

The advantage is rather that the quality is extremely predictable.
paolo.franzoi 12/5/2012 | 3:16:27 PM
re: Nortel on PBT: Today BT, Tomorrow the World!
There are some operational elements (like traceability and diagnostics) that are much better in PDH/SONET/SDH networks than Ethernet.

Need to monitor a troubled voice subscriber with TDM - pretty straightforward. In packet, ummm well redial and hope.

seven
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