Of course, this also means the Service Provider will
lose potential revenues for another 12 months.
Some sample (conservative) numbers are used in the Figure 1.14 and illustrate what
is basically a lose-lose outcome for both Service Providers and end users.
Using Ethernet instead of SONET/TDM means that such scenarios can be avoided
and furthermore, only the bandwidth required can be purchased. Ethernet ports on
devices can be tuned to offer bandwidth, usually upward of 1M, in linear increments (of
1M or less). This flexibility means the ability to use the bandwidth optimally. Ethernet,
therefore, enables a pay-as-you-use model that is naturally preferred over an inefficient
and expensive TDM-based model.
Figure 1.13 SONET/TDM versus Ethernet bandwidth availability
Bandwidth
Time Frame
OC-48 OC-12 OC-3 DS-3 DS-1
0
60
Ethernet
Bandwidth
Availability
SONET/TDM/ATM
Bandwidth
Availability
500M
Not to Scale
48
A Conservative Scenario: Customer with 155M wants 500M at month 48 and 622M at month 60.
A lose-lose OUTCOME:
1. Customer purchases OC-12 at month 48, Wastes: ($5000??“$3000) ?— 12 = $24000
2. Customer defers purchase of OC-12 until month 60: SP loses potential revenues: ($3000??“$2500) ?— 12 = $6000
Inefficiencies for both
Service Provider and Customer
Bandwidth Price Scenario (per month):
OC-3: $2500
OC-12: $5000
500M: $3000
34 Chapter 1
Lowest Service Cost (per bit) Ethernet-based services are priced consistently lower
than comparable TDM and Frame Relay services in almost all markets.
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