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Ethernet services

Ethernet's Missing Pieces

NEW YORK -- Ethernet Expo -- Ethernet services are all the rage, but a keynote talk yesterday brought in a dose of reality from the service provider perspective.

Rich Klapman, director of product marketing for Ethernet services at AT&T Inc. (NYSE: T), ran through a list of issues service providers are still grappling with. His goal wasn't to ruin everybody's day, but to further the dialogue about the tremendous amount of work that still needs to be done on carrier Ethernet.



Not all the issues are technical. For example, there's the struggle of getting salespeople to start preaching Ethernet to potential customers. "The sales forces are not as expert as we are here in the room," he said.

Carriers may need to get more aggressive in pushing salespeople to emphasize Ethernet. Heavy Reading analyst Stan Hubbard, in a separate Expo session, noted that at least one carrier in Europe has stopped offering incentives to its salespeople when it comes to TDM business.

Ethernet, for all its promises of low cost, also feels expensive to some enterprise customers, Klapman said. "The customer has this expectation that a T1 costs x dollars, so they ask why they can't get Ethernet at that price," he says. "Fifty percent are not able to square their business case to buy carrier Ethernet."

A similar sentiment was reflected in a morning session today. Mike Tighe, director of strategy at Verizon Enterprise Solutions and chairman of the MEF, noted that enterprises don't necessarily save money migrating to Ethernet, because the cost of swapping out infrastructure can wipe out the cost savings of the technology.

Klapman's biggest beef was a rather predictable one: operations, administration, and maintenance (OA&M) capabilities.

"The most critical thing we're missing today from a maintenance standpoint, is Ethernet OAM," he said. The Ethernet network as it stands is "like a plate of spaghetti -- you pull one end and something else happens on the other end."

As an example, he cited an incident where the lasers on one customer's equipment were affected by an event elsewhere in the network. "It was an outage because of a 100 millisecond event. Sonet doesn't have that," Klapman said.

Klapman also made note of Ethernet's lack of ubiquity. AT&T is trying to address this by building out its network; Klapman expects to have Ethernet reaching more than 80 percent of the carrier's customers by the end of this year. That build includes adding more points of presence in some markets, and overall, Klapman sees 2008 being "another heavy duty capital construction year" for Ethernet.

Ubiquity remains a problem. To reach more remote customers, AT&T would like to buy wholesale Ethernet services from other carriers -- but those other carriers often refuse, Klapman said. The result is that AT&T is building some of its own Ethernet access.

— Craig Matsumoto, Senior Editor, Light Reading

OldPOTS 12/5/2012 | 3:00:41 PM
re: Ethernet's Missing Pieces I thought the most telling comment was;
"AT&T would like to buy wholesale Ethernet services from other carriers -- but those other carriers often refuse, Klapman said. The result is that AT&T is building some of its own Ethernet access."

Who invests in the last access mile if there is not a lot of ARPU?

OP
paolo.franzoi 12/5/2012 | 3:00:39 PM
re: Ethernet's Missing Pieces
They are also missing:

Boston, Philly, Baltimore, DC, Vegas, Phoenix, Seattle, Minneapolis, and Denver.

Those are all pretty good size Metro areas.

seven
fsubob 12/5/2012 | 3:00:39 PM
re: Ethernet's Missing Pieces OK I'll give you 2 additional Tier 1 cities, the other 7 are Tier 2 cities.

With their current footprint they have 100's other cities to focus on. So don't use the excuse of lack of commonality in wholesale market as reason of slow rolling Ethernet services.
fsubob 12/5/2012 | 3:00:39 PM
re: Ethernet's Missing Pieces His comments confuse me:
"AT&T would like to buy wholesale Ethernet services from other carriers -- but those other carriers often refuse, Klapman said. The result is that AT&T is building some of its own Ethernet access."

Doesn't AT&T (SBC) own majority of the previous RBOCs (BellSouth, PacBell, Ameritech, SwBT) with the last mile access. what are the doing in these states with their own network.

The only major city they are missing is NY.

Wake up spell the coffee, fix your network first, then worry about wholesale networks.
paolo.franzoi 12/5/2012 | 3:00:39 PM
re: Ethernet's Missing Pieces
You have an interesting definition of Tier 1 and Tier 2. Most people use "NFL Cities" to represent Tier 1. Most of the cities I listed (I think Vegas is an exception) are NFL cities.

seven
bollocks187 12/5/2012 | 3:00:38 PM
re: Ethernet's Missing Pieces Why would you replace T1 Private Line service in which you have the capital sunk and make good revenue. With new Ethernet comes more capex and opex expenditure without the upside revenue to cover outlay.

It is not the right time to canabilize their own service. This will only be true when some other competitor takes a way a lot of the PL business - not going to happen anytime this decade - lol

jmunn 12/5/2012 | 3:00:31 PM
re: Ethernet's Missing Pieces Currently, the standard large Ethernet chip vendors are only beginning to recognize Carrier Ethernet as an area to target. Their chips don't support all the OAM and other features that CE needs. Why? Because the market is TINY compared to what they are used to. Why is it TINY, because it hasn't been deployed in volume.
Why hasn't it been deployed? Lack of CE feature support and a monster depreciated T1 etc. equipment install that just rakes in the money.

The big boys must be seeing some competition for higher rate links that has them have a "director of product marketing for Ethernet services". Do they have a VP for Ethernet Services yet?
jayja 12/5/2012 | 3:00:28 PM
re: Ethernet's Missing Pieces "...those other carriers often refuse."

What do you think happens when other operators want to "buy wholesale Ethernet services" from AT&T?
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