Service providers that ignore the capital-expenditure and operational-expenditure advantages of carrier Ethernet do so at their own risk, according to Frost & Sullivan, a Palo Alto, Calif.-based global consulting company.
A converged Ethernet network will allow service providers to economically address many of the needs of their business, residential and wholesale customers, the company says.
Frost & Sullivan's North American Carrier Ethernet Equipment Markets study reports that revenues in this market totaled $1.45 billion in 2006, and can reach $2.88 billion in 2013.
"Ethernet for the carrier infrastructure is a mature and proven technology, and the twin advantages of cost and scalability offered by carrier Ethernet particularly make a powerful case for deploying this technology in service provider network infrastructure," Frost & Sullivan Principal Analyst Sam Masud said.
"Deployment of carrier Ethernet equipment will be aggressive because it not only lowers service provider capex and opex," Masud said, "but also enables them to meet the requirements of some of the most talked-about applications."
Other notable benefits of carrier Ethernet, Frost & Sullivan reports, include enabling service delivery with strict SLAs, as well as allowing service providers to offer granular bandwidth, rather than rigid bandwidth hierarchy of legacy services.
Ethernet services can be offered with a broad range of speeds, typically from 1 Mbps to 1 Gbps, Frost & Sullivan said, while allowing for incremental increases within that range. No change to subscriber equipment is necessary if a subscriber opts to upgrade Ethernet service from 10 Mbps to 100 Mbps and, in some cases, to 1 Gbps.
On one hand, a challenge for the market's growth lies in that an overwhelming majority of office buildings are not connected by fiber, and therefore cannot get high-speed Ethernet services, the firm reports.
On the other hand, hyper-competition in the Ethernet services market threatens to erode some of the capex/opex advantages that stem from deploying Ethernet in carrier networks.
"There are also some vendors offering solutions for delivering Ethernet services over existing twisted pair," says Masud. "How much success their solutions have with service providers is unclear at this time, although these solutions do allow service providers to address the large small- and medium- sized business segment."
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