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Tracking the Ethernet Access Comet

I have to admit, I like to hang out with upbeat people and their smiling faces. That's why after the telecom meltdown, I chose to write and talk about carrier Ethernet. As a Heavy Reading analyst, I started with carrier Ethernet business services, expanded into carrier Ethernet switch/routers (CESRs), and am now closely tracking the burgeoning carrier Ethernet access platform (CEAP) market.

Since 2004, service providers have installed more than $4.5 billion worth of CESRs to help control network transport and aggregation costs and to facilitate the creation of new revenue-generating services delivered over a common Ethernet/MPLS-based infrastructure. Now these operators are deploying Ethernet access solutions to add more customer end-points to leverage metro network investments.

Heavy Reading has identified around 80 equipment manufacturers that sell a dozen major types of wireline equipment for Ethernet access, including the three types of solutions examined in our new "Carrier Ethernet Access Platform Quarterly Market Tracker": Ethernet over TDM access circuits; Ethernet over bonded copper pairs (G.shdsl and MIMO on DMT/VDSL2); and Ethernet over fiber switch/demarcation platforms.

At least 15 companies sell copper-based CEAPs directly and/or in partnership with system integrators and network equipment providers such as Ciena Corp. (NYSE: CIEN), Nokia Networks , Nortel Networks Ltd. , and complink 5682|Tellabs Inc.}. More than 30 vendors supply Ethernet-over-fiber solutions.

The new Tracker is being rolled out in phases to provide complete coverage across the CEAP space, starting with the copper-based solutions being deployed by 200+ operators worldwide. Carriers with significant Ethernet over TDM access circuit deployments include Level 3 Communications Inc. (NYSE: LVLT), Global Cloud Xchange , THUS plc (London: THUS), tw telecom inc. (Nasdaq: TWTC), Verizon Enterprise Solutions , and other sizeable operators mostly headquartered in Europe and North America. Notable operators using Ethernet over bonded copper pair platforms include Cavalier Telephone Inc. , Colt Technology Services Group Ltd , Easynet Ltd. , Magyar Telekom plc , Qwest Communications International Inc. (NYSE: Q), Windstream Communications Inc. (Nasdaq: WIN), and XO Communications Inc. .

Global sales of copper-based CEAPs rose 75 percent year-over-year to $185 million in the four-quarter period ending in the first quarter of 2008. Growth has primarily been driven by efforts to extend Ethernet services to more enterprise locations, but copper-based vendors also see emerging opportunities to address cell site/WiMax and DSLAM backhaul applications.

Heavy Reading estimates that RAD Data Communications Ltd. and ANDA Networks Inc. led the Ethernet over TDM access circuit market in the first quarter of 2008, with approximately 20 percent share each. Other suppliers with more than 10 percent share include ADVA Optical Networking , Ceterus Networks Inc. , and Overture Networks Inc. .

Hatteras Networks Inc. and Actelis Networks Inc. led the Ethernet over bonded copper pair platform market, with an estimated 38 percent and 29 percent share, respectively, in the first quarter of 2008. Adtran Inc. (Nasdaq: ADTN) has burst onto the scene in recent quarters and captured a 20 percent share.

Watch the Heavy Reading site for interesting CEAP news coming out of NXTcomm08, and plan on attending Ethernet Expo 2008 in New York in October to stay on top of the latest CEAP-related developments.

— Stan Hubbard, Senior Analyst, Heavy Reading


For more information or a FREE PREVIEW of the Carrier Ethernet Access Platform Quarterly Market Tracker, please contact:

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