Growing Business: Next-Gen infrastructure for Service Providers - 1 of 2

Metro Ethernet: A highlight for service providers
Residential opportunities
Summary of residential service offerings
Enterprise opportunities for service providers
Summary of enterprise service offerings
A new paradigm in enterprise networking

Metro Ethernet-based voice, video and data services are breathing new life into the service provider industry by reducing churn, increasing customer retention and creating diverse new revenue streams. Service providers such as FastWeb in Italy, Batelco in Bahrain, 51 Degrees in London, LDCOM in France and Oulu in Finland, are all using Metro Ethernet to create flexible, scalable cost-effective infrastructures, that will support a wide range of voice, data and video services for years to come.

Case point
Finish provider Oulu is using Long Range Ethernet, switching over copper wire plants to give its customers up to 15Mbs of symmetrical bandwidth and a wealth of next generation Metro Ethernet services.

Metro Ethernet is a technology opportunity with equal significance for both new and established network service providers. Due to the growing demand for next generation WAN services and seamless LAN interconnection, new service providers entering the market are able to quickly establish a sizable footprint and rapid positive cash flows. Incumbent providers are able to realize revenue increases by converting existing ADSL, cable, ATM and frame customers to more profitable and scalable Metro Ethernet services. Studies show that when customer premises have fibre optic connections, providers reach higher market shares with lower cancellation rates. FastWeb in Italy has achieved positive EBITDA cash flow after only two years.

Whether a service provider targets residential, SME or enterprise markets, or some mix, there are a number of business models that can provide sustained growth and a rapid paydown of debt. Once a residential or business customer is attached via fibre optic cable or LRE copper plant to the Metro Ethernet backbone, that connection can be used to flexibly provision anywhere from 1Mbps to 1000Mbs of bandwidth without changes to the hardware. Customers can be upgraded to a high bandwidth service with straightforward software controls.

Beyond basic data services, a Metro Ethernet connection can also be used to rollout a rich diversity of voice and video based services that provide incremental income to service providers without large additional capital investments. Because Metro Ethernet is based on cost-effective Ethernet devices and protocols, service providers can add new revenue-generating services to the Ethernet infrastructure in a matter of months, not years.

Residential opportunities

In existing Metro Ethernet deployments across our region, there is a growing list of revenue generating services that home users are aggressively subscribing to, including high-quality flat rate voice services, next generation internet access (eg, 10-100Mbps), television and video on demand, online gaming, multimedia ecommerce, video conferencing and more. 

Case point
In France, Lyse is offering residential customers a triple play of voice, video and data from 2 to 100 megabits per second, including flat rate voice over IP packages, video on demand, 40 channels of broadcast TV – all over a single IP based Metro Ethernet infrastructure.

In residential markets across our region, a number of successful Metro Ethernet providers are now offering a bundle of 'triple play" voice, video and data. This is a very desirable and unique offering to residential customers. The voice service is typically un-metred on the providers backbone; the data is symmetrical and much faster than traditional asymmetrical ADSL or cable services; and the streaming video on demand services offer powerful convenience and flexibility of viewing that is not available via traditional broadcast or cable services. Because each aspect of the triple play has its own unique strength in the marketplace, service providers are finding strong customer interest in Metro Ethernet-based offerings. Beyond the basic triple play package, service providers can add additional services - video based security, remote application services (ASP), video conferencing, remote backup and storage - on the same Metro Ethernet infrastructure.

Summary of residential service offerings

• Entertainment applications e.g. gaming, VoD
• Television over Ethernet
• Transactional services e.g. email, shopping
• Packet voice/IP telephony/teleconferencing
• Remote/residential storage, virtual hard disk
• Household automation (domotica)
• Information services (e.g. e-learning)
• IP VPN data services (home to office)
• Real time remote collaboration
• Transparent LAN services (TLS).

Case point
Swedish provider B2 is using its fibre optic-based Metro Ethernet infrastructure to roll out a range of value-added services to its large residential customer base, including streaming TV and movies, voice over IP, and high performance gaming on demand.

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