1. Emerging Markets See Greatest Growth Of Ethernet Over MPLS

    CEN Feature (Jan 17 2013)

    1. Emerging Markets See Greatest Growth Of Ethernet Over MPLS

      As they expand across the globe, enterprises and carriers are turning their attentions to upgrading or building their data networks in emerging markets, according to Telegeography’s Global Enterprise Networks report. The recently released report, updated each of the last three years, spans across 166 cities and examines the services provided by a total of 88 carriers in those markets.

      Carriers’ aggregate on-net Ethernet over MPLS (EoMPLS) coverage grew 11 percent in 2012. Coverage in Asia, Europe and North America grew between 10 and 12 percent last year, however on-net availability within each region varies widely, from just under 7 percent in Asia to 17 percent in North America. Meanwhile, despite Africa’s relatively 25 percent rate of deployment of the technology, EoMPLS coverage and service availability are just 1 percent there at the moment. Availability in Latin America increased just 3 percent in 2012.

      “Regions with a few sites that experience a modest increase over one year show big growth, but not much availability, yet,” said Robert Schult, analyst for Telegeography.

      Costs for EoMPLS and IP VPNs are still high in emerging markets due to less competition. However, carriers are expanding into these new markets because the opportunities to fulfill demand for multinational corporations or reach out to new local markets make sense at the new lower cost of international capacity, said Schult. Declining costs of capacity allow for lower prices, which in turn encourages more competition.

      “Prices have come way down for undersea transport with increased competition brought on by new undersea cable providers,” he said. As undersea cable providers make it easier for enterprises to use EoMPLS internationally it will be more cost effective for carriers to establish their own points of presence in emerging countries, he added.

      In non-emerging countries, carriers offer a range of point-to-point Ethernet implementations that include EoMPLS, EoSDH, and EoDWDM. Certain customer segments have preferences such as guaranteed latency and < 50ms restoration, so demand for EoSONET/SDH persists, said Schult. Technological advances in transporting Ethernet over DWDM also are making an impact, enabling multiple GigE links to be transmitted and switched over a single 10G wavelength at the optical layer. 

      “Previously a single Gigabit link consumed an entire 10G wavelength. That is a huge difference in terms of units of cost for the customer,” he added.

      Every indication is that Ethernet will surpass Sonet/SDH because very little investment is being made in the latter, he added. Regardless of what services are catching on in different regions of the world, Schult said there will continue to be a requirement for a hybrid network.

      "Ethernet is not yet available everywhere.  Customer may want it, but it's not everywhere yet." says Schult.  "Hybrid networks that deploy Ethernet where available, and Layer 3 VPN where it is not, will be the most common architecture." 

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