Ethernet continuing to defy gravity

Ian Redpath/Ovum
12 Nov 2009

While many telecoms sub-segments and European economies are stoically enduring a negative growth year, Ethernet continues to grow and prosper.

CEWC, held in Berlin on September 21-24, is the yearly European-based showcase for the Ethernet sector. In addition to Ethernet’s recession-defying growth, the key conference themes were carrier-to-carrier interconnection, the growing momentum of OTN-enabling platforms, and the push to increase Ethernet awareness in more economies worldwide.

Carrier Ethernet is both a service and a carrier transport infrastructure technology. Margaret Chiosi of AT&T provided some topical revelations on carrier Ethernet. “Ethernet is a strategy to meet cost-reduction targets. It is fundamental to the AT&T bottom line. It has become critical with attention and scrutiny from our senior corporate officers,” Chiosi said.

Coming from the world’s largest carrier, these are powerful statements about the central role and importance of Ethernet. Chiosi also elaborated on the new traffic driver, the iPhone, and its impact on the AT&T network. “The kids are getting smartphones. Smartphones are driving Ethernet/IP network growth. There are 60,000 AT&T cell sites in the US. Every cell site needs to go from T1 to Ethernet. Bandwidth is going up. Of all mobile users, 4% are iPhone users and they consume 50% of the backhaul bandwidth.”

AT&T is responding to the Ethernet opportunity on multiple fronts: enhancing global geographic availability and enhancing network performance and reliability. To sum up the AT&T view on Ethernet, “We are rolling out Ethernet as fast as possible. The market is there, the demand is there, now it is just an execution problem.”

The Verizon message was targeted at the enterprise Ethernet service market directly: “We have seen tremendous growth – both organic growth from existing customers and substitution growth of legacy data services. Growth is everywhere. There is a huge base of frame relay customers that never went to IP VPN networks because they wanted to maintain control of their IP routing. Those frame networks are obsolete and those customers will now consider Ethernet.”

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