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Carriers and Ethernet Services: Public Ethernet in Metro & Wide Area Networks 2009-2014

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Table of Contents

Market Segmentation
Press Release

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Ethernet, the protocol that is ubiquitous in enterprise local area networks, is now being offered by service providers as a metro or wide area service. These publicly available Ethernet services have been among the communications market’s fastest growing segments, with carriers enjoying revenue growth in the range of 30 percent annually as enterprises large and small opt for these new services that are being offered in an array of speeds and reach.

Carrier Ethernet offers the chance to tie customer locations together in what appear to be virtual LANs that can stretch across a metropolitan area, a region, the nation, or the world. Carrier Ethernet offers significant advantages in cost and simplicity and in facilitating convergence—and is often touted as a replacement for legacy data solutions like private line and frame relay. This Insight study projects market size, growth, and revenue, including segmented breakdowns of point-to-point and any-to-any services as well as by interface levels ranging from 10Mbit/s to the emerging 10Gigabit standard. This report provides insight into this emerging arena that will fundamentally shape the communications market of the future.


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    Report Excerpt

    1.1  Carriers and Public Ethernet Service

    Ethernet is the world’s computer-to-computer protocol, with interfaces on a billion computers worldwide—and it is well on the road to becoming a dominant force in metropolitan and wide-area communications. 

    Public Ethernet is still in a relatively early growth stage, though its heretofore robust growth is being temporarily slowed by current global recession and concomitant intensifying downward pricing pressures.  Ethernet remains, however, second only to IP in terms of growth potential and influence on the global communications market, and it has become an increasingly prominent feature of the national data networking landscape in the US.  Ethernet services are available from virtually all major US data service providers, including incumbents, second-tier carriers, and smaller specialized players, who tend to differentiate themselves by price, technology, and flexibility.

    Until recently, public Ethernet services had generally earned the label “metro Ethernet.”  The majority of Ethernet service— aside from access—has been, and still is, between points within a metropolitan area.  It is only relatively recently that public Ethernet has become more widely accepted as a wide area, long-haul service. 

    Public Ethernet's increasingly broad acceptance has been stimulated in part by the recent dramatic efforts of the incumbents in the Ethernet space..............

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    Market Segmentation

     

    Total US Carrier Ethernet Access Revenues:
          by Topology:
               E-Line
               E-LAN
              Access
          by Regional Domain
              Metro
              Wide-Area
              Access
          by Type of Sale
               Retail, Wholesale
          by Bandwidth Level
               greater than 1Gbit/s (1000Mbit/s)
               greater than 100Mbit/s up to and including 1Gbit/s
               greater than 10Mbit/s up to and including 100Mbit/s
               up to 10Mbit/s

    US Carrier Ethernet Total Port Estimates by Throughput
          greater than 1Gbit/s (1000Mbit/s)
          greater than 100Mbit/s up to and including 1Gbit/s
          greater than 10Mbit/s up to and including 100Mbit/s
          up to 10Mbit/s

    Sample Monthly Pricing for:
          In-Metro E-Line and E-LAN Services
          Dedicated Internet Access

    Average Price Range for E-Line and E-LAN Services


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    Table of Contents

     
    Chapter I
    EXECUTIVE SUMMARY

    1.1        Public Ethernet
    1.2        Ethernet Gains, Legacy Loses
    1.3        Forecast of Public Ethernet Services
    1.4        Market Trends

    Chapter II
    BACKGROUND & INTRODUCTION

    2.1        The Emergence of Public Ethernet
                 2.1.1   The Ubiquity of Ethernet
                            2.1.1.1   Data over Voice
                            2.1.1.2   Native LAN: Early Ethernet Services
                            2.1.1.3   Contemporary Ethernet Service
                 2.1.2   Public Ethernet Grows While General Market Declines
    2.2        Ethernet Services: Conceptual/Technical Building Blocks
                 2.2.1   User Network Interface
                 2.2.2   Ethernet Virtual Connection
                 2.2.3   Service Parameters
                 2.2.4   Performance Quality Parameters
                            2.2.4.1   Frame Delay
                            2.2.4.2   Jitter
                            2.2.4.3   Frame Loss
    2.3        Ethernet Topologies: E-line vs. E-LAN
                 2.3.1   E-Line
                            2.3.1.1   Ethernet Access
                 2.3.2   E-LAN
                 2.3.3   Other Typologies: Dedicated vs. Switched
    2.4        The Data Networking Context
                 2.4.1   Packet Data Networking
                            2.4.1.1   Internet Protocol
                            2.4.1.2   Packet and Virtual Networks
                            2.4.1.3   IP VPNs
                            2.4.1.4   MPLS
                 2.4.2   Ethernet and SONET
                 2.4.3   Resilient Packet Ring
    2.5        How to Look at the Ethernet Market
                 2.5.1   Ethernet’s Segments Defined
                 2.5.2   Wholesale Forecast Definitions
                 2.5.3   Carrier Ethernet vs. Public Ethernet
    2.6        The MEF and Carrier Ethernet’s Five Attributes
                 2.6.1   Service Standardization
                 2.6.2   Scalability
                 2.6.3   Service Management
                 2.6.4   Reliability
                 2.6.5   Quality of Service
    2.7        Pricing
    2.8        Examples of Major Public Ethernet Applications
                 2.8.1   LAN Extensions
                 2.8.2   Layer 2 Virtual Private Network
                 2.8.3   Dedicated Internet Access
    2.9        The Case For and Against Public Ethernet
                 2.9.1   Ethernet’s Drivers
                            2.9.1.1   The Importance of Video
                 2.9.2   Advantages of Public Ethernet
                            2.9.2.1   Reduced Cost
                            2.9.2.2   Ease of Use and Adoption
                            2.9.2.3   Scalability
                 2.9.3   Service Adoption Inhibitors
                            2.9.3.1   Inertia and Investment Requirements
                            2.9.3.2   The Service Provider Perspective: Reluctance to Invest
                            2.9.3.3   Fiber Connectivity and Service Availability Constraints
                            2.9.3.4   Copper’s Increasing Importance
                            2.9.3.5   Interoperability as a Barrier
                            2.9.3.6   Doubts Regarding Ethernet Remain, Dissipating
    2.10      Changing Industry Structure
                 2.10.1   Industry Consolidation: The Market Context
                              2.10.1.1   Consolidation: The Enterprise Perspective
                              2.10.1.2   Provider Strategies: Incumbent vs. Challenger

    Chapter III
    TRENDS, APPLICATIONS & MARKETS

    3.1        Working Together: Carrier Interoperability, Mergers, and Collaboration
                  3.1.1   Interoperability: The Current Problematic State
                  3.1.2   Interoperability: The Road Ahead
                  3.1.3   Service Interworking
                  3.1.4   Consolidation and Interoperability
                  3.1.5   The Road Ahead: Collaboration
                             3.1.5.1   Issues in Partnership and Collaboration: Pros, Cons
    3.2          The Competitive Outlook
    3.3          Widened Service Availability on Fiber and Copper
                   3.3.1   Fiber Expands, Slowly
                   3.3.2   The Importance of Ethernet Over Copper
                   3.3.3   Ethernet as Future Network Foundation
    3.4          The Issue of Service Pricing
                   3.4.1   Costs Beyond Service Pricing: The Real Deal
                   3.4.2   Why Select Ethernet: Cost Vs. Transformation?
                   3.4.3   Tunneling: Potential New Market-Changer
    3.5          Broadening of Applications and End Users
    3.6          Product Substitution: Ethernet Gains and Legacy Loses
    3.7          Ethernet's Growing "Maturity"
                   3.7.1   Quality of Service Issues
    3.8          The Retail Customer Perspective
    3.9          The Importance of Meshed, Any-to-Any Services
                   3.9.1   VPLS: New Face of E-LAN Emerging
                   3.9.2   EVPL
    3.10        Layer 3 vs. Layer 2 VPNs
    3.11        Public Ethernet Expanding Rapidly Into the Long Haul
    3.12        E-line Will Continue Strong, Steady Growth
    3.13        Wholesale Ethernet Grows Faster After Slower Start
    3.14        Bandwidth Trends
                   3.14.1   Bandwidth Rates Rising Inexorably
                   3.14.2   More Low-End Customers Build Low-End Ethernet
                   3.14.3   "Step Functions" as Applications?
    3.15        International Growth as NA Catches Up

    Chapter IV
    SERVICE PROVIDER PROFILES

    4.1          AT&T Corporation
                   4.1.1   Network Architecture
                   4.1.2   Services Offered
    4.2          Cogent Communications
                   4.2.1   Network Architecture
                   4.2.2   Services Offered
    4.3          Cox Cable
                   4.3.1   Network
                   4.3.2   Services Offered
    4.4          Global Crossing
                   4.4.1   Network Architecture
                   4.4.2   Services Offered
    4.5          Level 3 Communications, Inc.
                   4.5.1   Network Architecture
                   4.5.2   Services Offered
    4.6          Optimum Lightpath
                   4.6.1   Network Architecture
                   4.6.2   Services Offered
    4.7          Reliance GlobalCom (Yipes)
                   4.7.1   Network
                   4.7.2   Services Offered
    4.8          tw telecom
                   4.8.1 Network Architecture
                   4.8.2 Services Offered
    4.9          Verizon Communications
                   4.9.1   Network Architecture
                   4.9.2   Services Offered

    Chapter V
    MARKET FORECASTS

    5.1          Methodology
    5.2          Definitions and Forecast Segmentation
                   5.2.1   Definitions
                   5.2.2   Segmentation
                              5.2.2.1   Breakdown by Topology
                              5.2.2.2   Breakdown by Regional Domain
                              5.2.2.3   Wholesale vs. Retail
                              5.2.2.4   Breakdown by Bandwidth Level
    5.3          Market Forecasts
                   5.3.1   Total Market
                   5.3.2   Market by Topology
                   5.3.3   Market by Regional Domain
                   5.3.4   Retail vs. Wholesale
                   5.3.5   Bandwidth Levels

    Table of Figures

    Chapter I

    I-1         Total US Public Ethernet Revenues, 2009-2014

    Chapter II
    II-1         User Network Interface
    II-2         Frame Loss
    II-3         E-Line Point-to-Point Service Type
    II-4         E-LAN Multipoint-to-Multipoint Service Type
    II-5         Typical IP Network
    II-6         Managed Packet Network, Virtual Private Line
    II-7         Resilient Packet Ring Technology
    II-8         LAN Extension Using E-LAN Services
    II-9         Illustration of VLAN Tag Support
    II-10       Dedicated Internet Access
    II-11       Data vs. Video Traffic, 2005-2010 (Tbit/s)
    II-12       Three-Year Total Cost Savings for Ethernet Private Line

    Chapter IV
    IV-1        Level 3’s National Backbone Network

    Chapter V
    V-1         Total US Public Ethernet Revenues, 2007-2014
    V-2         US Public Ethernet Access Service Revenues, 2007-2014
    V-3         US Public Ethernet E-Line Service Revenues, 2007-2014
    V-4         US Public Ethernet E-LAN Service Revenues, 2007-2014
    V-5         US Public Ethernet Revenues by Application/Topology, 2005-2012
    V-6         Percentage Ethernet Revenues by Topology, 2009-2014
    V-7         US Public Metro Ethernet Revenues, 2007-2014
    V-8         US Public Wide-Area/Long-Haul Ethernet Revenues, 2007-2014
    V-9         US Public Ethernet Revenues by Geography/Region, 2007-2014
    V-10       Percentage Ethernet Revenues by Region, 2009 and 2014
    V-11       US Public Ethernet Topology by Regional Market, 2007-2014
    V-12       US Retail Public Ethernet Revenues, 2007-2014
    V-13       US Wholesale Public Ethernet Revenues, 2007-2014
    V-14       US Public Ethernet Revenues by Retail/Wholesale, 2007-2014
    V-15       Percentage Ethernet Revenues by Retail/Wholesale, 2009-2014
    V-16       US Public Ethernet Revenues >1Gbit/s, 2007-2014
    V-17       US Public Ethernet Revenues >100Mbit/s – 1Gbit/s, 2007-2014
    V-18       US Public Ethernet Revenues >10Mbit/s – 100Mbit/s, 2007-2014
    V-19       US Public Ethernet Revenues <=10Mbit/s, 2007-2014
    V-20       US Public Ethernet Revenues by Bandwidth Level, 2007-2014
    V-21       Percentage Revenues by Throughput Level, 2009 and 2014
    V-22       US Public Ethernet Total Port Estimates by Throughput, 2007-2014

    Table of Tables

    Chapter I

    I-1          Characteristics of Ethernet Service Varieties

    Chapter II
    II-1         SONET and Ethernet Defined Transmission Rates
    II-2         Characteristics of Ethernet Service Varieties
    II-3         Typical Price Range for E-Line Services
    II-4         Typical Price Range for E-LAN Services

    Chapter III
    III-1        Comparative Strengths of Layer 2 and Layer 3 VPNs

    Chapter V
    V-1         Total US Public Ethernet Revenues, 2007-2014
    V-2         US Public Ethernet Access Service Revenues, 2007-2014
    V-3         US Public Ethernet E-Line Service Revenues, 2007-2014
    V-4         US Public Ethernet E-LAN Service Revenues, 2007-2014
    V-5         US Public Ethernet Revenues by Application/Topology, 2007-2014
    V-6         Percentage Ethernet Revenues by Topology, 2007-2014
    V-7         US Public Metro Ethernet Revenues, 2007-2014
    V-8         US Public Wide-Area/Long-Haul Ethernet Revenues, 2007-2014
    V-9         US Public Ethernet Revenues by Geography/Region, 2007-2014
    V-10       Percentage Ethernet Revenues by Regional Domain, 2007-2014
    V-11       US Public Ethernet Topology by Regional Market, 2007-2014
    V-12       US Retail Public Ethernet Revenues, 2007-2014
    V-13       US Wholesale Public Ethernet Revenues, 2007-2014
    V-14       US Public Ethernet Revenues by Retail/Wholesale, 2007-2014
    V-15       Percentage Ethernet Revenues by Retail/Wholesale, 2007-2014
    V-16       US Public Ethernet Revenues >1Gbit/s, 2007-2014
    V-17       US Public Ethernet Revenues >100Mbit/s – 1Gbit/s, 2007-2014
    V-18       US Public Ethernet Revenues >10Mbit/s – 100Mbit/s, 2007-2014
    V-19       US Public Ethernet Revenues <=10Mbit/s, 2007-2014
    V-20       US Public Ethernet Revenues by Bandwidth Level, 2007-2014
    V-21       Percentage Revenues by Throughput Level, 2007-2014
    V-22       US Public Ethernet Total Port Estimates by Throughput, 2007-2014
     

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