Service Providers Benefits
Utilizing Ethernet in the access and beyond is also appealing to Service Providers primarily
because it simplifies their infrastructure, reduces costs, and most importantly,
offers a new source of potential revenues. Ethernet can be offered on a variety of infrastructures,
and delivering over one infrastructure versus the others means the cost
structure also varies (since some infrastructures are more optimized than others) and
impacts profitability.
That enterprises are also demanding Ethernet for the reasons discussed previously
further reinforces this appeal. The key benefits of Ethernet to Service Providers are
summarized next.
Higher Revenue Potential Through More Granular Bandwidth Offering Since more granular
services are delivered using Ethernet, there is an opportunity to derive more revenues
than with TDM services; for instance, if a customer has subscribed to a T-1
circuit, then if additional bandwidth, say 5M is required, the usual option is a T-3/DS-3
circuit, a 28 times increase in bandwidth at probably 15 times the price of a T-1, with
over 80 percent wasted. This rather undesirable option may actually lead to the customer
putting off purchasing the DS-3 until much later and consequently deferring
Service Provider revenues.
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