This IDC study analyzes the user trends and strategies adopted by SPs in the Japan wide area Ethernet service market amid the rapid market growth in 2005. It also provides a forecast of the future market. The analyses are based on the results of the Japan WAN Managers Survey, 2005 (IDC #JP202222M, July 2005). Information gathered from interviews with SPs are also used as reference. The forecasts for the 2005-2009 Japan wide area Ethernet service market have been revised to reflect the latest market developments.

"The price competition between NTT East Japan/NTT West Japan and power company-related providers rages on as these providers vie for new users. Although the wide area Ethernet service market has expanded drastically largely due to a demand shift from users of leased-line access, prolonged price competition may eventually cause profitability to suffer. To preempt this, some providers have shifted their focus from prices to quality improvement by providing wider bandwidths and expanding users' networks (access points). Attention to user needs and proactive marketing activities will probably be emphasized by SPs in promoting wide area Ethernet services in the future," says Hiroyuki Kodowaki, market analyst, Communications Research Group, IDC Japan.