December 8, 2009

Execs Tout Growth in Ethernet, Fiber

Cable operators are poised to grab a much bigger share of the Ethernet market from AT&T, Verizon and other telecom providers, executives said in New York City last Thursday.
 
Cox, Time Warner Cable, Cablevision Systems Corp. and other cable MSOs that are offering Ethernet services to businesses have about a 20 percent share of the sector, according to Light Reading analyst Craig Leddy, who moderated a panel on the Future of Cable Business Services.

Cable’s share of the Ethernet sector will double to 40 percent by the end of next year, predicted Mike Soulakis, the director of optical business development at Alcatel-Lucent.

Revenues from Ethernet services are projected to soar above $30 billion by 2013, Leddy said.

About 85 percent of U.S. commercial facilities are not connected to a fiber infrastructure, according to CableLabs director of business services strategic assessment Glenn Russell. That’s a big gap that cable operators can fill by delivering Ethernet services via fiber or coaxial cable running DOCSIS 3.0, executives on the panel said.

Glenn Calafati, director of product marketing and development at Cablevision’s Optimum Lightpath division, said the company bases its decision on whether to wire a business with fiber or coax on the amount of money its customers spend on its services.
 
“We base our build strategies on that spend. Once you have a certain telecom spend, I understand that I can bring a fiber-based service to your location,” Calafati said. “Leveraging technologies to split that fiber and add Ethernet technologies are just a win-win, I think.” 

Rogers Business Solutions vice president of service planning and management Tracy Markwood said the Canadian cable company is relying on both fiber and DOCSIS 3.0 to serve commercial customers.

“Leveraging the cable plant out there makes sense. DOCSIS 3.0 is perfect for a small and medium type business. But when you’re starting to get to a large enterprise, fiber is ideal,” Markwood said. “Fiber is a long-term investment. It’s going to support a multiplicity of series, way into the future.”

AT&T and Verizon are the leading Ethernet providers, and Time Warner Telecom, which was spun off from Time Warner in 1998, is ranked third, according to Leddy.

Ed note: Data on mid-2009 results collected by the Vertical Systems Group indicated that Cox Communications was the fourth-largest Ethernet service provider in the U.S. in terms of number of enterprise port installations, with Time Warner Cable ranked sixth. Fewer than four share points separate Cox, Qwest (fifth), Time Warner Cable, Cogent (seventh), XO (eighth) and Level 3 (ninth).

Calafati said Optimum is taking business away from the telcos that it competes against in the Ethernet space, but he wouldn’t project how much of a share cable would have of the sector a year from now.

“The reality is we do compete very effectively. We’ve been very disruptive in the market with our packaging of services,” Calafati said.

–Steve Donohue