Two Service Providers,
A and B, start out delivering Internet access services and employing Ethernet and
E-1, respectively. Assuming similar pricing and growth opportunities at both Service
Providers and a better customer retention rate for Service Provider A (as noted previously,
a Service Provider offering Ethernet service is better positioned to deliver almost
all of a customer??™s service requests), we find that Service Provider A will, with time,
receive higher revenues than Service Provider B. By the fifth year, Service Provider A
will, in fact, receive 2.6 times more revenues than Service Provider B across a similar
customer base of 100 customers.51
Meeting Customer Demand and New Growth Opportunities Market assessments indicate
a rapidly growing demand for Ethernet services for all the reasons discussed previously
in this section.52 According to Infonetics, over 86 percent of Service Providers indicated
high customer demand for new Ethernet services with about 57 percent wanting to
migrate from Frame Relay and ATM to Ethernet services.
Naturally, Service Providers find this demand appealing and are scurrying to provide
Ethernet service; in the North American market alone, over 200 Carriers are providing
some form of Ethernet service.
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