Ethernet services

Reports: Carriers Acclerating Ethernet

Solid demand is pushing service providers to deploy Ethernet services sooner than they expected, according to new research from both Heavy Reading -- Light Reading’s research arm -- and Infonetics Research Inc.

Several new reports show that Ethernet is emerging as a low-cost, convenient source of bandwidth, which serves the needs of both service providers and their enterprise customers.

Enterprises surveyed last year by Heavy Reading pointed to limited availability as the primary obstacle to growth in the Ethernet services market. But things may be changing fast: Heavy Reading's latest Ethernet Services Scorecard for North America finds that carriers are speeding up their efforts to meet demand: 122 operators were offering at least 589 Ethernet connectivity and Ethernet access-based services and applications in North America at the end of March.

"If I were an operator, I would be gearing for a much more competitive Ethernet market," says Stan Hubbard, senior analyst at Heavy Reading.

Infonetics Research’s study, "Service Provider Plans for Metro Optical and Ethernet," sees the same trends in Europe and the Asia/Pacific region as well as North America (see Infonetics Reports on Metro Ethernet).

Despite pressure to keep capital expenditure down, service providers are responding to strong demand for metro Ethernet services and increasingly investing in Ethernet gear for fear of losing out to competitors, says the Infonetics report. In addition, they are looking to Ethernet as a way to lower the cost of both new and legacy services.

Eighty-six percent of the operators surveyed by Infonetics said customer demand was high for metro Ethernet services, and about 60 percent reported high demand for shifting from legacy services to IP VPNs and Ethernet. The latter raises a real issue for carriers, as they ponder how best to offer Ethernet services: over Sonet/SDH to take advantage of the installed infrastructure, over existing IP/MPLS networks, or by building separate overlay Ethernet networks.

Light Reading's Ethernet Services Directory lists 223 carriers offering metro Ethernet over everything from ATM to VPLS, even using a mixture of different technologies as they migrate their networks, just to be able to provide some kind of Ethernet service to customers.

"One of the big reasons we are seeing most major operators move more aggressively on the Ethernet front is the fact that new carrier-grade features make Ethernet a more competitive and viable alternative to traditional legacy data services," Hubbard says.

This in turn poses a threat to Sonet revenues, as noted by a recent Frost & Sullivan report (see F&S Sees Squeeze on Sonet Sales). In fact, Hubbard says that Frost & Sullivan is underestimating the impact of Ethernet when it predicts an 8.3 percent CAGR for the Sonet wholesale market through 2010. "I would be careful anticipating" that kind of growth, he says. "The latest legacy wireline data figures and comments out of the largest U.S. operators -- with double digit annual decline -- suggest there is much more pressure on the market than this estimate implies."

— Nicole Willing, Reporter, Light Reading

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eran_levy 12/5/2012 | 3:17:49 AM
re: Reports: Carriers Acclerating Ethernet Although Ethernet over SONET is one of the options for transporting Ethernet, I'm not sure how future-proof it is, mainly in light of new applications such as video and TV, which demand effective multipoint capabilities, together with an increasing portion of pure data services, where efficient statistical multiplexing is a must.
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