Going Global

CEN Feature (Sep 23 2010)

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   Culturally, Europe is different from the U.S., there’s no question about it. The food is different, the clothing and hairstyles are different and so are the historic landmarks. Carrier Ethernet does not buck the trend, according to Erin Dunne, director of research services, Vertical Systems Group.

   With the exception of the U.K., most countries have an incumbent and a few other common carriers (OCCs). Therefore, Europe is a very different type of market than one finds in the U.S. where businesses have hundreds of Carrier Ethernet service providers from which to choose.

    

   “You have to look as Europe on a country by country basis” each with its own regulatory group and rules, she explains.

    

   Because they have the highest business center densities and are Europe’s most populous countries, France, Germany and the U.K. are the top markets for Carrier Ethernet providers. Businesses in these countries also have more multinational requirements for Carrier Ethernet links spanning across Europe or outside of Europe to the U.S., Asia or elsewhere. However, migration to Ethernet can be a harder sell in less populated European countries and places where DSL penetration is high and many companies already have a high-speed port that is competitively priced, she adds.

    

   When it comes to similarities, European and U.S. Carrier Ethernet customers share the same high demand for 10 Mbps ports up through 1 Gbps ports. Service providers also work with the same vertical markets – healthcare, education, financial services and government. And while EMEA as a whole equals the U.S. in terms of Carrier Ethernet revenue, Europe accounts for the bulk of that revenue, says Dunne.

    

   As a result of all of the above, the world’s global service providers have their eyes on Europe. According to Vertical Systems’ Mid-2010 Global Provider Ethernet Leaderboard, the carriers holding 4% or more of their business Ethernet ports outside of their home regions by the end of the first half of 2010 were: Orange (France), Colt (U.K.), Verizon (U.S.), AT&T (U.S.), NTT (Japan) and Tata Communications (India) (see chart). The report also notes that Verizon had the largest port share gain among all six carriers for the first half of 2010.

    

    

   

    

   “One of the biggest drivers of Carrier Ethernet services for U.S. carriers is [demand from] multinational companies,” says Dunne. Both AT&T and Verizon have similar business plans, which aim to provide multinational connectivity to support their customers’ sites “across the highway, the state or the pond,” she adds.

    

   Plus, the increasing number of global service providers—and the NNI relationships between them—have made it possible for enterprises to use Ethernet services to link their multinational sites across up to six continents, according to the report.

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