Announced today - an extensive study conducted on behalf of the Metro Ethernet Forum (MEF) by PointEast Research, highlights that the deployment of metro Ethernet will deliver significant, and increasing OPEX savings over legacy private line, frame relay and ATM services. Thirty six North American and European service providers provided data to create a real-world forecast model for a typical metro area over three years, and not only did it reveal an average 23% reduction in operating costs over the period, but the savings increased year on year. “This result, combined with another recent MEF study showing 39% CapEx savings, increases the pressure on incumbent and competitive service providers to go the way of BT, NTT, BellSouth, SBC, France Telecom and other leading service providers around the globe, in the roll-out of Ethernet services across metropolitan areas” said Nan Chen, President of the Metro Ethernet Forum.The critical advantages of Ethernet over legacy MAN technology is in the service provider’s ability to adjust bandwidth and update services immediately and remotely under software control, rather than the current approach of dispatching field service engineers to customer sites. Not only does this save wasted man-hours on the road, it also delivers a more flexible service, far more quickly thanks to the superior management features of Ethernet. The potential for saving would be enormous, bearing in mind FCC figures that put operating expenditure at 71% of total revenue for incumbent US providers in 2001.Leading service providers throughout the world concur that cost saving benefits will ensure metro Ethernet becomes the technology of choice; “Ethernet will definitely become the access backbone for telco IP infrastructures, due to its cost, flexibility, and scalability. It has rapidly become the de-facto standard that business customers request in their IP networks, ” commented Roger Roney, Product Manager, Ethernet at Bell Canada. Guido Roda, Director of Network Services at FastWeb in Italy agrees “ Ethernet is a perfect fit for providing connectivity in Metropolitan areas, as it combines carrier-grade robustness with the flexibility, performance and cost-effectiveness needed for the pervasive distribution of broadband services to a vast customer base.” Dave Senior, Co-Chair of the MEF’s Economic Committee commented “What makes these results all the more significant, is that standards and methods are still developing to leverage metro Ethernet’s full functionality – we can therefore expect even better results in the future – the 23% saving over 3 years highlighted in this particular study will prove to be a very conservative estimate.” The study was completed in December 2003, and is the most extensive carrier-data derived study of business telecom service costs ever derived. Included in the study is a real-world scenario based on a city of 1-2 million people, 50-80 thousand business establishments and 45 thousand buildings of which two thousand are of four or more stories, three thousand are of three stories and the rest are of one or two stories. A mix of E-Line (point to point) and E-LAN (multipoint) Ethernet services is compared with an equal offering of traditional DS1/E1, DS3/E3, and SONET/SDH Private Line and Frame Relay or ATM services. The study tracked a combination of initial provisioning, bandwidth upgrades, addition of new sites and services, as well as service monitoring requirements.Brian Van Steen, Principal, PointEast Research highlighted: “the scenario analysis model also recognised that first year sales will be primarily point-to-point (E-Line) links between large offices and that more widespread multipoint (E-LAN) links to smaller premises will follow later. Nevertheless, the scenario shows that potential operating savings would increase over time – from 18% in year one, to 20% in year two, and 24% in year three.”This study was initiated by the Metro Ethernet Forum (MEF) and is part of a series - a similar study based on Asian-Pacific service providers will be available later this quarter. Full versions of these studies will be made available to MEF members and Executive Summaries are available from the MEF upon request.Metro Ethernet Forum (MEF)