Carrier Ethernet 2006-2011: Market analysis and forecasts

SUMMARY

With a number of advancements made in the last two years, Carrier Ethernet has evolved into a reliable and scalable technology to help the transition to next-generation networks for fixed-line, cable and mobile operators. What benefits can be realised through Carrier Ethernet implementations and what are the strategic risks to bear in mind? Purchase this report to find out.

Carrier Ethernet has gained momentum worldwide and deployments will expand in 2007, particularly as mobile operators increase their focus on HSDPA and beyond, with Carrier Ethernet playing a greater role in such functions as backhaul and broadband aggregation. Which types of service providers are driving demand for Carrier Ethernet regionally, and for what purpose? This report will tell you.

Although still IEEE 802.3 based, Carrier Ethernet introduces some new architectural ideas, characterised by five attributes that differentiate it from LAN-based Ethernet, namely scalability, reliability, quality of service, standardised services and service management.

This 107-page report analyses the current status of Carrier Ethernet products, services and players. The report discusses Carrier Ethernet within the wider telecoms landscape, comparing it to competing and complimentary technologies. It identifies and covers main drivers and inhibitors, Carrier Ethernet's place on the technology map, key applications for various markets, and details the market evolution through 2011.

Questions answered by this report include:

• What role does Carrier Ethernet play across access, edge, metro and core
• networks?
• What are service providers' plans to establish or expand Ethernet's role in various network environments?
• What kind of momentum has Carrier Ethernet gained in global regions and how will deployments evolve through 2011?
• How can Carrier Ethernet and CESoE prove invaluable to mobile operators attempting to minimise backhaul costs?
• What percentage will mobile applications contribute to carrier Ethernet by 2011?
• Where do the biggest opportunities lie for technology vendors and service providers?

Why you should buy this report:

• Network operators: Discover what cost and efficiency advantages are achievable with Carrier Ethernet and how it compares to other technologies. Learn how Carrier Ethernet technology and the market are evolving. Learn about carrier-grade switching and routing platforms on offer from the leading vendors.
• Vendors: Read about service providers' attitudes and commitments towards Carrier Ethernet. Gain insight into where the biggest opportunities lie related to this market.
• Investors: Gain understanding into how and why the market will grow in the coming years. Find out which vendors are best positioned going forward.

TABLE OF CONTENTS

Chapter 1 Executive Summary

• 1.1 Service providers are waking up to the Carrier Ethernet opportunity
• 1.2 Multiple Carrier Ethernet applications exist
• 1.3 A clear migration path from existing infrastructures is driving Carrier Ethernet deployments
• 1.4 Carrier Ethernet evolution and forecasts

Chapter 2 Strategic Overview

• 2.1 Background
  • 2.1.1 Brief history of Ethernet
  • 2.1.2 The Metro Ethernet Forum
    • Chart 2.1: MEF membership growth, 2001 & 2006
    • Chart 2.2: MEF members by company type
• 2.2 Carrier Ethernet Defined
  • Figure 2.1: Carrier Ethernet components
  • 2.2.1 Carrier Ethernet characteristics and attributes
    • 2.2.1.1 Scalability
      • 2.2.1.1.1 Service scalability
      • 2.2.1.1.2 Bandwidth Scalability
    • 2.2.1.2 Reliability
      • 2.2.1.2.1 Resilient Packet Ring
    • 2.2.1.3 Quality of Service
    • 2.2.1.4 Standardised Services
    • 2.2.1.5 Service Management
• 2.3 Market drivers
  • 2.3.1 Business Market
    • 2.3.1.1 Cost
      • Chart 2.3: Ethernet vs SDH/SONET Interface Price Comparison for 10Gbps of Bandwidth
      • Table 2.1: Metro Ethernet savings from a single metro area
    • 2.3.1.2 High Bandwidth Applications and Service
      • 2.3.1.2.1 Storage and Business Continuity
      • 2.3.1.2.2 Content Rich Applications
    • 2.3.1.3 Granular Flexibility of Bandwidth
    • 2.3.1.4 Operational Simplicity
    • 2.3.1.5 Fast Provisioning
  • 2.3.2 Residential Market
    • 2.3.2.1 Triple Play
  • 2.3.3 Service Providers
    • 2.3.3.1 Wireless Service Providers
      • 2.3.3.1.1 Wireless Backhaul
  • 2.3.3.2 Fixed Line Service Providers
    • 2.3.3.2.1 A Service for Increased Revenue
    • 2.3.3.2.2 A Technology for Enabling Services
    • 2.3.3.2.3 Broadband Networks Backhaul
• 2.4 Market barriers
  • 2.4.1 Geographic Reach
  • 2.4.2 Competing Technologies
  • 2.4.3 Entry Price
  • 2.4.4 Investment in Legacy Technology
  • 2.4.5 Service Complexity
  • 2.4.6 Interworking
  • 2.4.7 Customer Perception
  • 2.4.8 Complex Scalability
  • 2.4.9 Standards
    • Figure 2.3: Ethernet evolution to Carrier Ethernet
    • Table 2.2: Comparison of Carrier Ethernet services

Chapter 3 Services and Applications

• 3.1 Defining Services
  • 3.1.1 E-Line
    • Figure 3.1: E-Line Type Service Architecture
    • 3.1.1.1 Ethernet Private Line
    • 3.1.1.2 Ethernet Virtual Private Line
  • 3.1.2 E-LAN
    • Figure 3.2: E-LAN Type Service Architecture
    • Figure 3.3: Applications map to transport agnostic standardised service types
• 3.2 Carrier Ethernet services and applications
  • 3.2.1 Business Market Services
    • 3.2.1.1 Data Centre Consolidation and Virtualisation
      • 3.2.1.1.1 Virtualisation
      • 3.2.1.1.2 Location Consolidation
      • 3.2.1.1.3 Carrier Ethernet as a Solution
      • Figure 3.4: Consolidated data centres for virtualised service provision
    • 3.2.1.2 Storage Area Networks
      • 3.2.1.2.1 Carrier Ethernet as a SAN extension
    • 3.2.1.3 VPNs
      • 3.2.1.3.1 Carrier Ethernet as an access mechanism for the VPN
        • 3.2.1.3.1.1 MPLS
        • Figure 3.5: MPLS VPNs and Carrier Ethernet
        • 3.2.1.3.1.2 VPLS
        • 3.2.1.3.1.3 Tag Stacking
        • 3.2.1.4 Content Rich Applications
        • 3.2.1.5 High Speed Internet Access
        • 3.2.1.6 VoIP
  • 3.2.2 Residential Market Applications
    • 3.2.2.1 Rise in broadband lines
      • Chart 3.1: Global broadband subscribers, 2005-2011
    • 3.2.2.2 Triple play
      • Table 3.1: Worldwide IPTV subscribers and revenues, 2005-2011
      • 3.2.2.2.1 Existing networks will not meet the technical needs of delivering triple play services
      • 3.2.2.2.2 Carrier Ethernet over Copper will emerge as a viable alternative
      • 3.2.2.2.3 Deployment of Ethernet in the aggregation layer is a growing trend
      • 3.2.2.2.4 Ethernet aggregation standardisation efforts
      • Figure 3.6: Ethernet aggregation reference architecture by DSL Forum
      • Figure 3.7: Ethernet aggregation reference architecture by ITU-T
• 3.3 Mobile Service Provider Network Infrastructure
  • 3.3.1 The need for equipment upgrades to deliver new applications
  • 3.3.2 Carrier Ethernet as Backhaul
    • 3.3.2.1 HSDPA backhaul demands
    • Figure 3.8: RAN Backhaul network
    • Chart 3.2: Expected commercial launches by region in 2006
    • 3.3.2.2 Carrier Ethernet can deliver cost-savings whilst meeting the increased bandwidth demands in the backhaul
      • 3.3.2.2.1 Ethernet in the backhaul architectures
      • Figure 3.9: Node B connects to Carrier Ethernet for backhaul for all traffic backhaul
      • Figure 3.10: Node B connects to Carrier Ethernet for backhaul for HSDPA traffic only
      • Figure 3.11: Circuit emulation for backhauling to Carrier Ethernet
    • 3.3.2.3 Converged services will further fuel drive for Carrier Ethernet backhaul
    • 3.3.3.3 Issues to consider for Carrier Ethernet-based backhaul
      • 3.3.3.3.1 Synchronisation
      • 3.3.3.3.2 Total cost of migration
      • 3.3.3.3.3 Amount of traffic to be backhauled
    • 3.3.4 Use of pseudowires
• 3.4 Fixed Line Carriers
  • 3.4.1 Carrier Ethernet Applications
    • 3.4.1.1 Residential markets and triple play
    • 3.4.1.2 FMC
    • Table 3.2: European households subscribing to bundled services, 2005-2011
    • 3.4.1.3 Other market opportunities
    • Chart 3.3: E-Line vs E-LAN service revenues, 2005-2011

Chapter 4 Market Trends and Evolution

• 4.1 Certification
  • 4.1.1 MEF9
  • 4.1.2 MEF14
    • Table 4.1: MEF certified vendors
    • Table 4.2: MEF certified service providers
  • 4.1.3 Benefits of MEF certification
• 4.2 Ethernet Market Evolution
  • 4.2.1 From Enterprise to Carrier
    • Table 4.3: Enterprise vs Carrier Ethernet
    • Figure 4.1: Ethernet evolution to Carrier class
  • 4.2.2 Inter-working with Other Technologies
    • Chart 4.1: Ethernet vs Frame Relay revenues, 2006-2009
    • 4.2.2.1 Progress towards inter-working
      • 4.2.2.1.1 Vendors have developed Multiservice Edge Routers
      • Figure 4.2: Common aggregation for diverse technologies and services
      • 4.2.2.1.2 SDH/SONET investments
      • 4.2.2.1.3 VPLS has been developed
      • 4.2.2.1.4 Ethernet over MPLS
• 4.3 From Services to Transport
• 4.4 Improved Services
  • Figure 4.3: Service Providers Improve Services to Meet Customer Needs
• 4.5 Vendor Products
  • 4.5.1 Key Product Developments
    • 4.5.1.1 Ease of Migration
    • 4.5.1.2 QoS
    • 4.5.1.3 Carrier Ethernet Portfolio
    • 4.5.1.4 New Architectures
• 4.6 Ethernet Over Copper
  • 4.6.1 Ethernet over Copper deployments are on the rise
• 4.7 Higher Speeds
  • 4.7.1 Increased traffic will drive higher speeds
    • Figure 4.4: Ethernet's progression towards higher speeds
• 4.8 Falling Costs
  • Chart 4.2: Price for 10Gbps of Ethernet Bandwidth, 2002-2010
  • 4.8.1 Lower IC prices will drive cost reductions
• 4.9 Consolidation
  • 4.9.1 Vendor Consolidation
  • Chart 4.3: Vendor Carrier Ethernet market share
    • 4.9.1.1 Consolidation will continued as a trend
  • 4.9.2 Service Provider Consolidation
    • 4.9.2.1 Expanding service reach through partnerships
• 4.10 Service Topology
  • Chart 4.4: E-LAN as % of total Ethernet connections, 2005-2010
• 4.11 Revenues
  • Chart 4.5: Global Carrier Ethernet revenues, 2005-2011
  • Chart 4.6: Carrier Ethernet revenues by region, 2005-2011
  • Chart 4.6: Highest Revenue Generating Countries for Ethernet Services in Western Europe, 2006-2009

Chapter 5 Key Technology Developments

• 5.1 Transport
  • 5.1.1 Copper and Fibre (IEEE 802.3ah EFM)
  • Figure 5.1: Ethernet in the First Mile on the Global Ethernet Standards
    • 5.1.1.2 Ethernet in the first Mile over Copper (EFMC)
    • 5.1.2.1 2BASE-TL
    • 5.1.2.2 10PASS-TS
    • Figure 5.2: Short Reach and Long Reach Options for EFMC
      • 5.1.1.2.3 802.3ad
    • 5.1.1.3 Ethernet in the First Mile over Fibre (EFMF)
    • 5.1.1.4 Ethernet in the First Mile over Passive Optical Network (EFMP)
    • 5.1.1.5 Operations, Administration and Maintenance (OAM)
  • 5.1.2 Wireless
    • 5.1.2.1 Plans to cover wireless access using WPP
    • 5.1.2.2 FSO as a complementary technology
  • 5.1.3 SDH
  • Figure 5.3: SDH moves to Next-Generation SDH
    • 5.1.3.1 GFP
    • 5.1.3.2 VCAT
    • 5.1.3.3 LCAS
  • 5.1.4 Resilient Packet Ring
• 5.2 Operations, Administration and Maintenance
  • Figure 5.4: IEEE 802.3ah OAM
  • 5.2.1 ELMI for OAM
  • 5.2.2 Vendors are implementing 802.1ag
    • Figure 5.5: Ethernet OAM Layers
  • 5.2.3 EDDs
• 5.3 VPLS
  • 5.3.1 Ethernet over MPLS core
  • 5.3.3 Benefits of VPLS
  • 5.3.3 VPLS drawbacks
  • 5.3.4 HPVLS is the optimum solution for Ethernet VPNs

Chapter 6 Service Provider Analysis

• 6.1 Competitive landscape
  • Table 6.1: Main Ethernet service providers by country
• 6.2 Service Provider profiles
  • 6.2.1 COLT
  • 6.2.2 KPN
  • 6.2.3 Orange Business Services
  • 6.2.4 Deutsche Telekom
  • 6.2.5 Telefonica
  • 6.2.6 Telecom Italia
  • 6.2.7 NTL:Telewest Business
  • 6.2.8 Exponential-e
  • 6.2.9 Completel
  • 6.2.10 Vanco
  • 6.2.11 Level 3
  • 6.2.12 Verizon Business
  • 6.2.13 Yipes Enterprise Services

Chapter 7 Conclusions and Recommendations

• 7.1 Conclusions
• 7.2 Recommendations
  • 7.2.1 For Service Providers
  • 7.2.2 For Vendors

Appendix A About visiongain

Appendix B Report evaluation form

Organizations Listed

• 3GPP
• 3GPP2
• Actelis
• Adva
• Alcatel
• Anda
• Asia Netcom
• AT&T
• Atrica
• Axxera
• Axxessit
• Bahamas Telecom
• Bellsouth
• BT Fusion
• BTGS
• Cabletron
• China Telecom
• Cisco
• COLT
• Completel
• Covaro
• Deutsche Telecom
• DSL Forum
• Easynet
• Equant
• Ericsson
• Ethernet Alliance
• Exponential-e
• Extreme Networks
• Fibernet
• Force10
• Foundry Networks
• France Telecom
• Hatteras
• HGC
• Huawei
• ICG Communications
• IEEE
• IETF
• Interoute
• Iometrix
• ITU
• Juniper
• Kazakh Telecom
• KPN
• Level 3
• Liberty Global
• Lucent
• Marconi
• MCI
• Metro Ethernet Forum (MEF)
• Metro Packet
• MetroRD
• Microsoft
• neuf telecom
• Nortel
• NTL:Telewest
• Omnilux (ClearMesh)
• onFiber Communications
• OPAL Telecom
• Orange
• Orange Business Services
• Overture
• Priority Telecom
• Progress Telecom
• PTT Classica
• Quake Technologies
• Qwest Communications
• Rabobank
• RAD Data Communications
• Redback
• Riverstone
• Sichuan Telecom
• Smart Telecom
• TelCove
• Telecom Italia
• Telefonica de Espana
• Telenor
• TeliaSonera
• Tellabs
• Teragate
• T-Systems
• Vanco
• Verizon
• Verizon Business
• Viatel
• VIVO
• VMware
• Wharf T&T
• WilTel
• Wireless Facilities
• World Wide Packets
• Yipes Enterprise Services