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North American Carrier Ethernet Equipment Markets

Product Type: Market Research Report
Published by: Frost & Sullivan
Published: November 2006
Product Code: R1-5633
Description
Market Overview

Cost and Scalability Advantages Promote Ethernet Services among Carrier Networks

The benefits of low per-port cost and scalability that Ethernet brings to the local area network (LAN) are powerful arguments for extending the technology to carrier networks. Vendors can feel optimistic about the deployment of Carrier Ethernet Networks as apart from lower capital expenditure and operational costs, it also enables services to be delivered with strict service level agreements (SLAs). Furthermore, Carrier Ethernet allows service providers to offer granular bandwidth, instead of being constrained by the rigid bandwidth hierarchy of legacy services. While 10-Gigabit Ethernet is the benchmark at present, there is some early talk that the next iteration of Ethernet will operate at 40- or 100-Gbps. This is probably a few years away, but could then offer a bonanza of relatively low-cost bandwidth.

While Carrier Ethernet is undoubtedly on a fast-growth trajectory, there are at the same time a number of factors that could hold back its rate of growth. "Most importantly, vendors will have to continue supplying solutions that have carrier-class features yet ensure that they do not compromise on Ethernet’s key value proposition of cost and scalability," explains the analyst of this research service. "Other considerations that could negatively impact the Carrier Ethernet market range from the limited number of fibered buildings to service providers wanting to protect existing revenue streams as they move subscribers from legacy to Ethernet services."

Ethernet Emerging as a Cost-effective Option for Broadband Triple Play and Backhauling

With Infrastructure costs plaguing service providers operating multiple single service networks, service providers are moving toward a converged core based on multi-protocol labeling switching (MPLS), converged services (everything over IP) and converged access (Ethernet). For telecom companies (telcos) experiencing erosion of voice revenues with residential broadband services used by other service providers to piggyback voice-over-IP services, Ethernet is the low-cost, high-bandwidth transport option for broadband triple play. This apart, the backhaul needs of the burgeoning wireless services market can be met cost effectively with Ethernet services. Ethernet can provide transport for backhauling data traffic, as data rates supported by wireless cellular networks increase, and is also well positioned for aggregating traffic from IP/Ethernet-based digital subscriber line access multiplexers (DSLAMs) and Ethernet-based passive optical networks (PONs).

The deployment of Carrier Ethernet equipment has until now been driven largely by the demand of businesses for metro Ethernet services, a market that is expected to grow at more than 20 percent compound annual growth rate (CAGR) through the next several years. E-Line services currently account for about one-half of the demand, with the remainder divided between E-LAN and Internet access. However, the numbers are anticipated to shift in favor of E-LAN services, with Voice over Internet Protocol (VoIP) being one of the drivers for E-LAN. "One statement that can be made with confidence is that the market for Carrier Ethernet equipment will develop rapidly - the only uncertainty being the pace at which it develops," says the analyst. "Factors impacting the growth rate of Carrier Ethernet are hardly confined to the technical challenges confronting Carrier Ethernet Switches/Routers, and much depends on the business decisions service providers make regarding the markets they target for Ethernet connectivity."
Table of Contents

1. North American Carrier Ethernet Market

        1. Introduction and Market Overview

                  1. Executive Summary

                  2. Technology Overview

                  3. Scope of Study

                  4. Market Overview

                  5. Market Engineering Measurements

        2. Market Forecasts and Trend Analysis

                  1. Market Drivers

                  a. Cost and Scalability

                  b. Network Convergence and Triple Play

                  c. LAN Extension with Bandwidth Granularity

                  d. Backhaul

                  e. Metro Ethernet Forum

                  f. EFM over Copper

                  2. Market Restraints

                  a. Dark Fiber

                  b. Sub-10 Mbps Ethernet

                  c. Slow Telco Triple-play Rollout

                  d. Confidence in Legacy Service

                  e. MEF Specifications

                  f. Beyond Internet Access

                  g. Best-effort Ethernet

                  3. Industry Challenges

                  4. Market Revenue and Forecasts

                  5. Market Dynamics

                  6. Ethernet Evolution

                  7. Vendor Profiles
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