March of wide area Ethernet technology unstoppable, says analyst

Carrier Ethernet services are poised to expand across Europe fuelled by operator network migrations, enterprise demand and the inherent benefits of the networking technology, industry experts predict.

Frost & Sullivan noted that carrier Ethernet services in Europe generated revenues of $1.1bn in 2005 and will reach nearly $5bn in 2012.

Some applications will take off later rather than sooner, but will generate a surge in demand for Ethernet services later in the product cycle.

"Bandwidth intensive applications, the introduction of new services and the need to reduce costs are creating a move from traditional bandwidth-limited telecom services to technologies such as Ethernet," said Frost & Sullivan research analyst Fernando Elizalde.

"End users are requiring services that are more flexible and scalable hence generating savings by contracting what they actually need."

Carrier Ethernet services in the metropolitan space are becoming increasingly popular as the technology evolves and becomes standardised, according to the Frost & Sullivan report.

The deployment of services such as triple-play is creating a demand for Ethernet services in the metropolitan space for aggregation of data and transport in the backbone.

Furthermore, with the launch of third-generation mobile services, mobile data usage is expected to surge along with wireless backhaul traffic which is currently transported over connections averaging 2Mbps.

"Out of a need to achieve cost efficiencies and augment service offerings, operators are migrating their networks to next-generation infrastructures based on IP and Ethernet," said Elizalde.

"Consequently, legacy services will be phased out and Ethernet will be replacing layer 2 services."

However, the analyst warned that customer awareness is being affected by the limited footprint of these services.

Few pan-European operators have a consistent offering across Europe, while national operators have been introducing long-haul services only in the recent past.

"There are still standardisation issues to overcome," said Elizalde. "The lack of interoperability testing until the end of 2005 obstructed the possibility of extending carrier Ethernet services on an end-to-end basis when several carriers were involved."