Although pricing varies widely, Ethernet
services are typically at least 20??“30 percent lower than Frame Relay or private line
services.
In 2005, 25 percent of Ethernet service revenue was for wholesale, representing
$1.5 billion, much of which came from point-to-point GE (1 Gigabit per second Ethernet
or Gigabit Ethernet) links. Wholesale Ethernet services will grow slowly to reach $3.8
billion in 2009, which will account for 17 percent of all Ethernet services??”a five-year
CAGR of 27 percent.
Just like corporations and other end-user organizations, service providers are looking
for ways to connect their various sites with higher bandwidths at cheaper prices per
bit, and GE point-to-point services meet this demand. Many carriers are quite comfortable
using GE links, while others are just beginning to employ them, so the wholesale
segment will continue to grow rapidly.
The other three-quarters of Ethernet service revenue is retail, comprising Internet,
Ethernet Private Line (known as EPL, or also E-LINE), and Transparent LAN (known
as TLAN, or also E-LAN) services. TLAN is growing strongly for two reasons: (1) many
large providers are starting to introduce TLAN services, and (2) TLAN is a natural
upgrade path from today??™s multisite networks connected with Frame Relay, ATM, or
private lines (these networks are big ticket items).
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