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HR: Carriers Gearing Up for Ethernet

Network operators expect a huge revenue boost from ethernet services, Heavy Reading finds

NEW YORK -- Network operators around the world continue to gear up for a huge push into the carrier Ethernet services market, making Ethernet the centerpiece for telecom industry growth prospects for the next several years, according to the results of a major survey of service provider professionals conducted by Heavy Reading (www.heavyreading.com), the market research division of Light Reading Inc. (www.lightreading.com).

The 2006 Survey of Ethernet Service Providers provides full results and analyses of the exclusive, invitation-only survey, which drew responses from nearly 160 executives at 125 different network operators worldwide – making this one of the most comprehensive surveys of Ethernet service providers ever undertaken. The survey, conducted in the third quarter of 2006, delivers an independent, quantitative assessment of a full range of carrier Ethernet deployment plans, including:

  • Plans, customer demand, and growth expectations for Ethernet connectivity services and Ethernet-based business applications
  • Perceived competitive advantages associated with different Ethernet service features
  • Plans for Ethernet-based residential services
  • Major factors influencing carrier Ethernet equipment purchasing decisions
  • Perceived leaders in the carrier Ethernet equipment market
  • Major factors affecting the extension of Ethernet services to more locations
  • Current use of and plans for various types of carrier Ethernet equipment and technology
  • Anticipated allocation of carrier Ethernet-related spending across key applications

"Heavy Reading had high expectations for the carrier Ethernet services and equipment markets entering 2006, and it's clear that both markets are firing on all cylinders and barreling full-speed ahead," notes Stan Hubbard, Senior Analyst at Heavy Reading and author of the report. "Worldwide, operators large and small continue to report impressive double-digit or higher year-over-year revenue growth for Ethernet services, and carrier Ethernet-related equipment has been flying out the doors of many vendors."

Some of the world’s largest technology suppliers are now vying for market share in the carrier Ethernet equipment sector, which Heavy Reading estimates will reach $1.4 billion in 2006. Market leaders in carrier Ethernet gear include Cisco Systems, Alcatel, Huawei Technologies, Lucent Technologies, Nortel Networks, Ciena, and Siemens.

Key findings of the 2006 Survey of Ethernet Service Providers include the following:

Service provider attitudes and plans related to carrier Ethernet services and applications are characteristic of the early stages of a boom market. Multiple survey results lead to this conclusion, including the widespread expectation of robust Ethernet enterprise and Ethernet-based consumer services revenue growth; big plans to roll out all types of new Ethernet connectivity services and applications; relatively modest price pressure thus far for Ethernet connectivity services; and a general belief that there are many opportunities to differentiate and gain competitive advantage in the market.

Service providers plan to invest heavily in broadening their Ethernet connectivity service offerings over the next couple of years. Survey results point to significant deployment plans for every type of Ethernet service defined by the Metro Ethernet Forum. A vast majority of respondents – 80 percent or more – say their company plans to provide E-Line and E-LAN services in metro and national markets by the end of 2008. This is a huge leap forward compared with the number offering such services today.

Respondents consider the ability to provide Ethernet connectivity to any location, regardless of access media, as the single most important competitive advantage in the market. More than half of respondents also believe they can achieve a strong competitive advantage by offering high service availability and end-to-end SLAs.

There is a particularly high level of test/trial activity associated with wireline and wireless access solutions that make it easier to take Ethernet to more locations. While Ethernet in the First Mile (EFM) fiber and Ethernet over TDM platforms have been the most widely deployed access solutions to date, the highest level of test/trial and RFP activity has taken place in the EFM-fiber and EFM-copper categories. These play a critical role in driving market growth by enabling Ethernet access to the masses.

The 2006 Survey of Ethernet Service Providers costs $3,795 and is published in PDF format. Report purchasers also gain access to a searchable database of survey results allowing for detailed breakouts of respondent data, such as by:

  • Service provider type
  • Geographic location
  • Company size
  • Types of Ethernet services offered

For additional information, or to request a free executive summary of this report, please contact:

Dave Williams
Sales Director
Heavy Reading
858-485-8870
[email protected]

Press/analyst contact:
Dennis Mendyk
Managing Director
Heavy Reading
201-587-2154
[email protected]

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About Heavy Reading
Heavy Reading is an independent market research organization offering quantitative analysis of telecom technology to service providers, vendors, and investors. Its mandate is to provide the comprehensive competitive analysis needed today for the deployment of profitable networks based on next-generation hardware and software.

About Light Reading Inc.
Founded in 2000, Light Reading Inc. (www.lightreading.com) is the ultimate source for technology and financial analysis of the communications industry, leading the media sector in terms of traffic, content, and reputation. It reaches an extensive audience of executives and technologists within the telecom and enterprise networking communities, as well as the financial/industry analysts and investors who track these sectors. Light Reading was acquired by United Business Media in August 2005, and operates as a unit of CMP Technology.

About CMP Technology
CMP Technology (www.cmp.com) is a marketing solutions company serving the technology industry. Through its market-leading portfolio of trusted information brands, CMP has earned the confidence of more technology professionals than any other media company. As a result, CMP is the premier provider of access, insight and actionable programs designed to connect sellers and buyers in ways that yield superior return on investment. CMP Technology is a subsidiary of United Business Media (www.unitedbusinessmedia.com), a global provider of news distribution and specialist information services with a market capitalization of more than $3 billion.