Heavy Reading
EXECUTIVE SUMMARY

Carrier Ethernet Services: Who's Doing What

After a long period of floundering, the North American Ethernet services market is now on the right path to expansion with 75 carriers offering several hundred Ethernet connectivity and access-based services. Carriers of all stripes are rolling out solutions at a fairly steady pace to meet growing demand from enterprises, educational institutions, and government agencies for greater bandwidth and service flexibility at a lower cost per Mbit/s than traditional TDM private-line and data services can provide.

All this activity reinforces the perception that Ethernet is well on its way toward becoming the universal telecom service able to be efficiently delivered and supported by large and small carriers alike at attractive price points for the entire range of customers that might ever need high-bandwidth solutions.

Carrier Ethernet Services: Who's Doing What delivers a comprehensive analysis of today's market by exploring the types of Ethernet services offered, the various features supported by underlying network technologies, and the specific Ethernet services now being offered by individual carriers.

The cornerstone of the report is a groundbreaking analysis of all Ethernet services now available from network operators in North America. In total, the report contains critical Ethernet service deployment information for 79 different network operators in North America, including 44 public companies and 35 private companies.

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The report analyzes carrier Ethernet services by the following criteria:

General service type (connectivity services or access-based services and applications enabled over Ethernet)

Specific service type (Ethernet private lines, Ethernet private LANs, Ethernet virtual private lines, Ethernet virtual private LANs, business network services, or business applications)

Geographic reach (intra-metro or inter-metro service)


Along with this comprehensive and timely data on the overall Ethernet services market, the report delivers an in-depth examination of the Ethernet strategies, service portfolios, technology and equipment choices, service footprint, and expansion plans of these 13 leading operators:

AboveNet Inc. (OTC: ABVT.PK)
AT&T Corp. (NYSE: T)
BellSouth Corp. (NYSE: BLS)
Level 3 Communications Inc. (Nasdaq: LVLT)
Masergy Communications Inc.
MCI Inc. (Nasdaq: MCIP)
OnFiber Communications Inc.
Qwest Communications International Inc. (NYSE: Q)
SBC Communications Inc. (NYSE: SBC)
Time Warner Telecom Inc. (Nasdaq: TWTC)
Verizon Communications Inc. (NYSE: VZ)
XO Communications Inc. (OTC: XOCM.OB)
Yipes Enterprise Services Inc.

Taken together, the broad industry analysis and the carrier deep-dives shed light on important industry trends that are likely to shape the Ethernet services landscape over the next few years.

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Key Findings

Key findings from the report include the following:

The Ethernet services market is clearly in an exciting growth period. We are witnessing burgeoning enterprise interest in Ethernet services, an expansion of service offerings on the part of operators, and a move by equipment vendors to deliver more products with greater carrier-class features.

Seventy-five different service providers now offer Ethernet services in North America. Those offerings include more than 330 Ethernet connectivity and access-based services with about 290 Ethernet connectivity and Internet access services. While connectivity services account for nearly 80 percent of all the major service offerings, Internet access is by far the most common Ethernet service offered today.

The arrival of carrier-class Ethernet solutions could hardly be more timely, with service providers needing to increase the profitability of data services as their wireline voice revenues continue to erode. On the cost-control front, Ethernet plays a critical role in enabling operators to move toward a single, automated, converged network that supports multiple services.

Because the business case for Ethernet is so compelling, network operators don't really need to worry right now about whether there will be a big market for Ethernet. The Ethernet services market can grow into the billions of dollars in the next few years by simply supplanting the huge legacy TDM private line, ATM, and Frame Relay markets. Added to this will be new revenue from previously underserved or untapped sources, such as schools and local governments.

The emergence of the Ethernet services market is leading carriers to rethink their conservative rollout strategies, with some carriers even taking the "build it and they will come" approach widely adopted in the telecom bubble era. Much of the competitive advantage in the Ethernet services market will go to those carriers that can claim large coverage areas either on their own or through partnerships, because Ethernet's true value is best unleashed when more locations can connect at high-bandwidth rates and more services can flow over shared network resources.

Despite the promise of Ethernet and the progress of operators in rolling out services, a number of challenges remain before Ethernet solutions can become ubiquitous. Challenges include the need to: (1) expand service footprints, (2) strengthen service management, and (3) develop well-thought-out strategies for service targeting and portfolio management.

While the choice of feature options has been limited and not particularly well suited for carrier MAN and WAN requirements, vendors have been adding more product capabilities to support true carrier-class Ethernet services. These carrier-class features include rapid, Sonet-like restoration, end-to-end service level agreements (SLAs), seamless support for voice applications, robust service management, and greater scaleability than traditional Ethernet solutions.

Report Scope and Structure

This report is one of the most comprehensive examinations of the Ethernet services landscape in North America published by any market research firm. It is based on interviews and other input from dozens of carriers, conversations with leading equipment vendors, and additional primary research. It also draws upon Heavy Reading's 2004 Ethernet and Links surveys of operators, enterprises, and technology suppliers. This report complements the survey findings and adds greater depth in terms of understanding how services are built, which operators are offering which solutions, how services are being priced, and what key operators are planning to do with their portfolios in the future.

Service matrices for each network operator pinpoint exactly which types of Ethernet services are being offered by each carrier, as well as the current market status of those services.


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In addition to cataloging all Ethernet services now available in North America, the report compares carrier Ethernet service strategies to yield valuable insight into the choices now being made by service providers and how those choices will affect development of the Ethernet services market over the next several years.


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Along with a wealth of data on service deployment and availability, the report includes detailed charts covering sample prices for different types of Ethernet services. Pricing information comes not only from carrier tariffs but also from direct interviews with network operators, yielding a realistic view of exactly how network operators are pricing their Ethernet offerings.


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This report's structure is as follows:

Section II examines five general categories of market drivers: Ethernet benefits; carrier and vendor enthusiasm; industry trends and standards activity; customer needs; and external events and mandates. It also highlights some of the key challenges carriers need to overcome, such as: footprint / reach; service management; and service targeting and portfolio management.

Section III identifies and summarizes the basic building blocks for Ethernet service creation, drawing upon feature and attribute definitions developed within the Metro Ethernet Forum (MEF).

Section IV provides comprehensive definitions for the various Ethernet connectivity services that are based upon work in industry standards bodies where possible as well as general understandings that have evolved within the service provider and vendor communities.

Section V provides highlights on the Ethernet service offerings of all the North American carriers and includes a detailed table identifying the various connectivity and access-based services sold by individual operators. This section also includes service pricing data.

Section VI includes extensive profiles of 13 key providers of Ethernet services. The profiles summarize carrier Ethernet strategies, the markets serviced by all Ethernet services in the carrier portfolio, the network equipment used to support all of the carrier's Ethernet services, and Ethernet-related plans. We also provide a set of standard information for the 80+ connectivity and Internet services sold by the 13 operators, including:

1) the service name;
2) a description of the service;
3) the speed and bandwidth scaleability of the service;
4) service performance characteristics;
5) SLA and billing comments;
6) technologies used to support the particular service;
7) the coverage area for the particular service;
8) applications supported by the service; and
9) the target market for the service.


Finally, Section VII offers conclusions and recommendations for enterprises, service providers, and equipment vendors.

The report is essential reading for a wide range of industry participants, including the following:

Ethernet service providers: How does your rollout strategy for Ethernet services compare with those of other service providers? Which types of services are your competitors bringing to market? How deep will the competitive field be for Ethernet services? Which technologies are settling in as the most popular choices? How do your pricing strategies align with those of other carriers?

Equipment suppliers: Which network operators are pursuing Ethernet services most aggressively? Which types of services and which technologies are they choosing? Who are the most aggressive emerging network operators, and how do your products mesh with their service deployment plans? Are there any Ethernet service providers that are slipping through the sales cracks?

Enterprise users: Which carriers are offering the kinds of Ethernet services that you need? Who is making the strongest carrier commitment to Ethernet? Are your service prices in line with what other carriers are offering, or is there an opportunity for you to strike a better deal?

Investors: Which equipment makers and service providers are in the best position to capture market share in this important telecom industry sector?


Carrier Ethernet Services: Who's Doing What is published in PDF format. The report is sold as an enterprise license, which means it can be distributed throughout the purchaser's organization.

LENGTH: 75 PAGES
PRICE: $3,495
STAN HUBBARD
Senior Analyst, Heavy Reading
A communications professional with extensive experience in wireline-related business analysis and strategic marketing, prior to joining Heavy Reading Hubbard spent seven years with Ciena most recently as director of market intelligence...
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KEY FINDINGS
Ethernet services are clearly primed for an exciting and extended growth period
75 service providers now offer some type of Ethernet service in North America
Connectivity services account for about 80 percent of all Ethernet service offerings
Carriers now perceive Ethernet services as critical to their future revenue streams
Many operators are adopting the "build it and they will come" approach for Ethernet
Equipment vendors are adding more carrier-class features to win business in this market
SERVICE PROVIDERS PROFILED IN THIS REPORT:
AboveNet Inc. (OTC: ABVT.PK)

AT&T Corp. (NYSE: T)

BellSouth Corp. (NYSE: BLS)

Level 3 Communications Inc. (Nasdaq: LVLT)

Masergy Communications Inc.

MCI Inc. (Nasdaq: MCIP)

OnFiber Communications Inc.

Qwest Communications International Inc. (NYSE: Q)

SBC Communications Inc. (NYSE: SBC)

Time Warner Telecom Inc. (Nasdaq: TWTC)

Verizon Communications Inc. (NYSE: VZ)

XO Communications Inc. (OTC: XOCM.OB)

Yipes Enterprise Services Inc.

DELIVERABLES
75 pages of analysis of North American Ethernet services market strategies and technology options

Complete listing of all carrier Ethernet services now available in North America from 75 different carriers

In-depth analysis of market and technology plans of leading Ethernet service providers

Data on sample pricing for different types of Ethernet services

LENGTH: 75 PAGES
PRICE: $3,495
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