is an old technology and the carriers may be hesitant
to adopt it. But there are some key benefits of implementing
an Ethernet service over a Metro network. by Ong Boon
is ironic that the almost ancient Ethernet technology
is now seen as the next big step for the carrier metro
networks. But it is hardly surprising. Given the ubiquity
of Ethernet in corporate LANs, it is natural that Ethernet
will also make the best and most cost-effective WAN
technology. At the very least, it is more elegant than
the various ways of retrofitting telecom lines and cables
for data transfer over long distances.
So why is Ethernet not yet a key ingredient in carrier
networks today? There are two main reasons. Firstly,
most carriers are tenacious preservers of legacy investmentsand
rolling out Ethernet-based Metro Area Networks (MANs)
means more expense will be incurred in laying new fiber
optic cables and replacing modems with IP-switches.
Secondly, the demand for Ethernet over service provider
networks has not been exactly ravenous. But it may soon
Several prominent telco experts who spoke during keynotes
at the recent CommunicAsia event in Singapore (June
2002) were strong in their support for Ethernet-based
MANs, which they say will form a crucial part of carriers'
next-generation networks. One keynote speaker, Anand
Parikh, founder of Appian Communications, presented
a rather convincing cost-benefit analysis for Ethernet
MANs. He showed that the technology will not only save
money for enterprises, it will also dramatically improve
carriers' service provisioning, billing, and voice-integration
In North America, spending on MANs will increase five-fold
over the next four years, from USD 420 million to USD
2.7 billion in 2006, according to Infonetics Research.
It reported that most businesses with LANs use dial-up,
DSL or T1 connections to connect to their WANs or the
In this respect, Asia does not lag behind. According
to market researcher IDC, the number of metro Ethernet
subscribers in the Asia-Pacific (excluding Japan) will
grow from 0.28 million in 2001 to 9.29 million in 2006,
representing a CAGR of 110 percent. The revenue proposition
looks even better. IDC predicts that the same market
will generate USD 1.5 billion in revenues by the end
of this year, from USD 395.34 million in 2001. And it
will grow at a CAGR of 118 percent to USD 19.44 billion,
from 2001 to 2006.
Although Ethernet is no longer a new technology,
it has the potential to solve some of legacy data
access methods' biggest deployment and performance
headaches. According to Yipes, a US metro Ethernet
service provider, some of these legacy access
issues are as follows (note that the service specs
reflect US domestic services):
Basic rate ISDN (128 Kbps)very low bandwidth,
does not scale, interface and link layer conversion
Primary rate ISDN (up to 1.47 Mbps)does
not scale, interface and link layer conversion
Frame relay (64 Kbps to 45 Mbps)interface
and link layer conversion required, different
standards for encapsulation, packets may be
Asynchronous transfer mode (ATM, up to 62 Mbps)complex
to configure, interface conversion required,
expensive interfacing, requires layer 2 reframing
(AAL), complex service planning.
Private line T1 (1.54 Mbps)does not scale,
low bandwidth limit, requires TDM timing, requires
encapsulation, configuration is routing protocol
Private line DS-3 (45 Mbps)expensive,
long lead time, requires TDM timing, requires
encapsulation, configuration is routing protocol
Private line SONET (155, 622, 2488, 9953 Mbps)expensive
(USD 12,000 per Gb compared to USD 850 per Gb
for Ethernet), large jumps between bandwidth
increments, requires POS protocol conversion,
large jump from 2 Mbps to 45 Mbps (but also
possible with properly provisioned IP VPN),
configuration is routing protocol dependent.
So what are the benefits of implementing Ethernet service
over metro networks? Michael Kelly, CTO of XA TMI, offers
two. First is flexibility in bandwidth allocation. For
example, enterprises can obtain multiples of 1 Mbps
bandwidth pipes instead of a large jump from 2 Mbps
to 45 Mbps when more than 2 Mbps is required. In addition,
Ethernet is also well adapted to bursty traffic, unlike
rigid leased lines, which need to be provisioned first.
enterprises can save on hardware since Ethernet-based
customer premise equipment (CPE) are cheaper than telco
interfaces, he says. There will also be savings from
hardware management, as Ethernet is more widely known
Ethernet strength is its flexibility. For instance,
enterprises can easily scale up or down when they upgrade,
downgrade and even relocate their Ethernet services.
They can also deploy multiple services over a single
Ethernet interface. This benefits service providers,
since only one link is required to connect to all their
clients. This level of simplicity ultimately means less
roll-out costs for service providers.
Yipes, a US-based Ethernet MAN provider, published a
white paper that detailed the merits of having an Ethernet
'dialtone' in enterprises. It opined that having Ethernet
at a WAN level lets network administrators attain virtually
all design objectives of an enterprise network. These
objectives include the ease of connectivity, flexibility
to scale and change network design, end-to-end quality
of service, high operational redundancy, low administrative
support and low capital expense.
The fastest Ethernet MANs today are based on fiber optic
links, offering bandwidth up to 1 Gbps. They can be
offered as OSI layer 2 and 3 services. At layer 2, which
is the data link layer, enterprises will be able to
control the network connectivity of the service. At
layer 3, which is the network layer, the service provider
takes care of the network connectivity between branches.
Layer 3 Ethernet MAN services must therefore be well-managed
by the service provider.
Regional data and voice service provider XA TMI, has
Ethernet offerings in several Asian cities that provide
bandwidth in multiples of 1 Mbps using its customers'
existing layer 2 technologies. XA is also looking at
extending its layer 2 Ethernet service across its regional
backbone network. Singapore's StarHub also offers a
fiber-based Ethernet service called IP.Q, which is designed
to support IP protocols at both OSI layers at up to
1 Gbps. It is linked to 600 buildings in Singapore's
central business district and other industrial parks.
StarHub currently offers only managed Ethernet services,
but says that it will soon sell layer 2 offerings. Another
Singapore-based regional provider, SingTel, currently
offers a layer 2 fiber-based Ethernet service, called
So which Ethernet service class is superior? There is
no clear answer here, says Andrew Grenville, vice-president
for product marketing and management, business markets,
StarHub. He says that depending on the types of networks
and the applications that customers have, both modes
of Ethernet have their merits. Just as there are times
when a provider-managed service is desirable for ease-of-use,
there will be environments where enterprises need complete
"Layer 3 Ethernet service can be very useful for
customers who are building multi-site VPNs and would
like to vary QoS based on different requirement levels,"
On the other hand, he added, layer 2 provisioning lets
customers design their own traffic prioritization, VPN
routing and applications such as online storage and
recovery where Ethernet class speeds (10 Mbps or higher)
For service providers however, it is important that
they support both layer 2 and 3 network protocols, says
Grenville. This will let them better administer SLA
commitments and provide more transparent connectivity
to customers. Offering both modes of Ethernet access
also gives customers a choice.
A key feature of IP.Qand increasingly, for most
new IP data services like SingTel's Mega@POPis
the use of MultiProtocol Label Switching (MPLS) at the
network backbone. MPLS is a way of tagging traffic as
it enters the edge of a WAN, so that MPLS-enabled switches
and routers can ensure that each data stream flows in
a preferable network path, thus ensuring QoS. The best
part about MPLS is that it is transparenttagging
can be applied at the ingress and stripped at the egress,
without involving any application at all.
Using MPLS, service providers like StarHub can extend
their MAN service beyond local fiber hubs, since an
MPLS core can be used to link different MANs using a
shared backbone. A MPLS-based IP core can also be used
to aggregate ATM networks, although whether end-to-end
quality of service can be maintained in a hybrid ATM/MPLS/IP
network is still open to argument.
Don't write off legacy
On the horizon, the rise of Ethernet MANs does not yet
spell the death of entrenched telephony-based access
like ISDN, DSL, leased lines, or even ATM services.
Since telecom operators are well-known for making the
most out of legacy investments, expect a long fall-off
period, if any, for these offerings.
"Ethernet will be popular as one of the important
data interfaces for the enterprises, but other interfaces
like ATM and leased lines will retain their dominant
position," says Goh Boon Huat, SingTel's deputy
director, IP Services.
Instead of supplanting leased circuits, Goh sees Ethernet
MANs as filling a growing market segment which demand
transparent LAN access, and are located in fiber-concentrated
business districts. For example, with optical Ethernet,
it is easy to offer 2,3,4,5 Mbps services, whereas traditional
services would see a big jump in bandwidth from 2 Mbps
to 34 Mbps. In this respect, it will be able to fill
a gap in high speed data services.
But even optical Ethernet, he says, should be viewed
as merely a more flexible interface, in that the bandwidth
is more flexible. "How useful the customer will
find this is still dependent on what this Ethernet is
connected to. For instance, are we talking about Internet
access, VPN access or transparent LAN?"
His advice to MIS seeking WAN services is to not place
undue emphasis on the network interface types, but on
how the service will be applied. "Remember that
even Ethernet cannot exist by itself as a service, and
has to be part of a managed offering," he says.
In the end, enterprises must understand what the real
value proposition of a service is before taking the
plunge. This means that careful analysis of traffic
types and patterns will be required before scoping out
a new service requirement.
In short, Goh is saying is that MIS should take the
Ethernet hype with a dose of reality. Indeed, experts
have questioned the reliability of Ethernet as a mission-critical
transport layer. For example, some experts have pointed
out that Ethernet restoration takes a few seconds compared
to SONET's 50ms, which is a crippling blow to the former's
reliability claims. This and SONET's inherently more
secure logical paths means that SONET still retains
an edge as a WAN transportat least in the near
future. In addition, SONET's time-division multiplexing
(TDM) capabilities means that it is still the undisputed
leader in carrying voice traffic.
the LimitWill lack of fiber coverage curb
Ethernet MANs in Asia ?
The lack of fiber availability is the main limiter
to Ethernet MAN proliferation in Asia today. But
IDC believes that the momentum will build up rapidly,
with China and Korea leading the way. "China,
Hong Kong, Korea and Taiwan are the markets to
watch," says Renee Gamble, Market Analyst,
Communications Research. She says that although
China will dominate the subscriber market, Korea
is where revenues will be strongest.
"The service is getting a big push in Hong
Kong and is set for commercial launch in Taiwan
this year, but more likely to take off in 2003."
She says the residential demand for Ethernet will
be strong, accounting for 80 percent of total
market in the next five years. However, it is
the corporate segment which will be the main revenue
generator for Ethernet MAN providers. She reckoned
that the latter will likely dominate with 90 percent
of total revenues.
Looking forward, StarHub's Grenville sees an inevitable
escalation of bandwidth and new value-added services.
He says that StarHub is already planning to extend IP.Q
to 10 Gbps.
In particular, the need for enterprises to have data
residing outside its own LAN for disaster recovery purposes,
but still managing that data as part of its LAN environment,
will drive IP-WANs and Ethernet MANs, he says. As for
service types, hot trends will include global-managed
services, VoIP, VPN, multicast and video-streaming applications.
In the longer term, he expects Ethernet MANs to converge
with mobile networks such as GPRS and 3G to extend the
reach of corporate data networks.
As for optical Ethernet, he believes that it will eventually
spread into the satellite cities around main fiber-laden
hubs. When that happens, cross-regional Ethernet solutions
will become viable. "Of course, traditional telecom
service providers will try to use the existing telecom
infrastructure to provide the optical Ethernet service,
while new startup telecom service providers will build
a new MPLS platform or switch platform to provide the
service," he says.
XA TMI's Kelly expects lots of infrastructural upgrading
work for carriers in the next few years as they retool
for Ethernet and IP. For one, carriers are likely to
focus on developing switching capabilities that can
handle point-to-multipoint and rapid failure detection
so that their IP services can become more "carrier
class", he says.
But don't expect to see the zealousness in spending
that typified carriers five years ago. "Today's
telecom environment does not favor providers installing
a lot of new equipment for new services whose take-up
may be slower than anticipated," he says.
Instead, most will look to retrofit existing equipment
to offer Ethernet services. He noted that some equipment
vendors are already adding Ethernet features in their
router and switch upgrades, which means service providers
and telcos simply need to ramp up the capacity between
the switches and routers to roll out high-bandwidth
In the longer term, some carriers will begin to use
Ethernet MAN for voice services as VoIP at the PBX becomes
more widespread, he says. But he does not think that
Ethernet everywhere will happen soon.
Says Kelly, "Other than multiple 1 Mbps service
offerings, Ethernet over international lines will take
longer because cost is still high on many routes."