Many Asian carriers seeking to get an edge over their global-carrier competitors are driving the emergence of business Ethernet services in the region. This should be short-lived, however, as the increasing popularity of the Ethernet approach begins to force the hand of the larger international network operators as well.
Momentum is strong as carriers are rolling out Ethernet services to satisfy customer demand, and as the technology is widely perceived to enable a simplified solution at an attractive price. According to Synergy Research, service providers in the Asia-Pacific region are investing heavily to deliver next-generation services over Ethernet. In addition, sales of Carrier Ethernet routers increased 33% in the first half of 2007 to $356 million over the same period in 2006.
Some companies, particularly in the banking and finance sector, that need to maintain an isolated network for security and network control will certainly find Ethernet over SDH/SONET a more cost-effective option. Ethernet is also becoming an attractive option for internet access and VPNs, and it is ideal for high-bandwidth connectivity to data storage/backup facilities.
Metro Ethernet is now available in many major cities in the region - mostly from local carriers. This is partly driven by operators using the technology to support multi-play services to both consumer and enterprise markets. Hong Kong Broadband, for example, has rolled out metro Ethernet to offer the combination of voice, broadband internet, IPTV and corporate data services.
Asian carriers are also ramping up their efforts to implement long-haul Ethernet, but mostly offering private-line services and any-to-any Ethernet using the virtual private LAN service technology to offer VPN services. VSNL International offers a global service over SDH/SONET scalable between 2 Mbps and 1 Gbps. It is also offering Ethernet over MPLS, which includes both point-to-multipoint relay services and point-to-point wire services for providing Layer 2 and Layer 3 VPN services.
Other Asian carriers have also deployed any-to-any Ethernet services via VPLS. Telstra launched in August 2005, starting with coverage in Japan, Hong Kong, China, Singapore and Taiwan. SingTel's service, launched in August 2006, covers the same markets plus Korea, the UK and the US. Hutchison Global Communications has extended its VPLS coverage to the US, Korea, Taiwan and China (Beijing and Guangdong) by partnering with respective local operators.
While regional carriers have been moving forward with Ethernet, global carriers such as AT&T, BT and Orange Business Services are adopting a wait-and-see approach for E-LAN Ethernet deployment in Asia because customer needs can typically be addressed with their MPLS VPN services. These global carriers, however, do offer customers Ethernet as an option to access their MPLS nodes. The more urgent task is to expand the availability of Ethernet access into more markets within Asia Pacific.
Services offered by VSNL, Telstra, SingTel and others are not posing a significant threat to global carriers as there is still work to be done to enhance these, particularly in coverage expansion. Also, carriers do not need E-LAN to be able to offer IP-based services like VoIP, internet access, data-center hosting and application management.
Among the global carriers, Verizon Business has been the more assertive, announcing its plans to deploy Ethernet virtual private line and Ethernet VPLS in five locations (Hong Kong, Tokyo, Singapore, Melbourne and Sydney) as it extends its convergence packet architecture into the region. Once Verizon Business does so, other global carriers will need to reassess the need to counter this move.