Carriers Prep for Metro Optical and Ethernet Investments

SAN JOSE, Calif., Jan. 28 -- Service provider metro capital expenditures are beginning the shift from legacy time division multiplexing (TDM) to products based on IP and Ethernet, driven by increasing customer demands for metro Ethernet services, according to a study by Infonetics Research, Service Provider Plans for Metro Optical and Ethernet. Service providers plan to offer more Ethernet services, plus other services over Ethernet, but their spending plans could speed up if manufacturers solve a number of tricky technical challenges, the company said.

For example, according to the study, nearly two-thirds of the service providers plan to roll out QoS-based services over Ethernet by next January, including packetized voice, bandwidth on demand and private lines, but manufacturers must address the problem of providing quality of service for Ethernet services, the highest-rated technical challenge. This is a particularly nasty problem, since providers use different technologies to reach their various target customers: wholesale (provider-to-provider), large business, medium business, small business, SOHO and residential.

"All carriers are offering Ethernet or will soon, because corporations are demanding it," said Michael Howard, principal analyst at Infonetics Research and lead author of the report. "Ethernet offers higher bandwidth at a lower price per bit and is simpler. Carriers offer Ethernet services over a variety of technologies, including MPLS (multiprotocol lambda switching), SONET/SDH, RPR (resilient packet ring) and wavelength division multiplexing, raising the complexity and creating some tough technical issues for manufacturers to address. As soon as they do, they'll find service providers ready to invest."

The study is based on formal interviews with 27 infrastructure-owning service providers in North America, Europe and Asia Pacific, as well as informal discussions with these and many other service providers.

For more information, visit: www.infonetics.com