This year marks Metro Ethernet Forum's 10 year anniversary, which also signifies a turning point in a growth of Ethernet service installations that have up to 10Gb bandwidth or more.
According to a recent report put out by Vertical Systems Group, Ethernet bandwidth is capturing the lead despite the fact that there are still many companies that have entirely let go of their ATM, T1, and Frame Relay services. The research group also predicts that Ethernet bandwidth rates will increase more than twofold by 2015, based on its investigation of requirements for enterprise services.
In an interview with FierceTelecom, Vertical System Group's Principal and co-founder, Rosemary Cochran, said that "from 2005-2015, the access connections have a compound growth rate of 1 percent, but the bandwidth is 22 percent.” Cochran's rationale behind this is that "while the access connections haven’t changed much, the capacity of those connections has gone up quite a bit.”
Throughout the transition phase, providers such as Verizon and AT&T are noticing IP and Ethernet services continue to climb while T1, Frame Relay, and ATM circuits are decreasing.
This trend was displayed in the results of AT&T's 2nd Quarter business earnings, who reported over $9 billion in total company revenues – which was down less than half of a percent successively as well as just over 4% versus 2nd Quarter reports from last year. The slim drop is attributed to slow legacy data and voice products. Concurrently, AT&T stated that next-generation services, including applications, IP conferencing, hosting, VPNs and Ethernet grew an impressive 19.4%.
Vertical Systems Group took three major factors into account while conducting its research: the 5 million connections utilized by businesses, such as broadband (DSL and cable), ATM, private line, IP connection, Frame Relay and Ethernet, their speeds, and the quantity of bandwidth available for use.
Cochran notes that clients are moving to supplementary services, "and that’s the point at which they look for alternatives." With companies looking to take their services from Frame Relay and T1 circuits and upgrade them to Ethernet, they are researching an assortment of options, such as cable operators and CLECs, which in-turn generates fresh opportunities for the players that do not have to cope with salvaging the revenues of legacy services.
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