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U.S. Wholesale Carrier Ethernet Services Market Update - 2010
Frost & Sullivan, April 2010, Pages: 57
Carrier Ethernet services, as defined in this study, include all layer 2 services sold under various names- transparent or native LAN, metro Ethernet, Ethernet private line (EPL), Ethernet virtual private line (EVPL), Ethernet access, and virtual private LAN service (VPLS). The study analyzes market drivers, restraints and market trends for carrier Ethernet services. Market forecasts for the period 2006-2014 are provided for metro and long haul market, for different services under each of these segments, and for different ports speeds sold in the wholesale carrier Ethernet services market. A brief info on pricing trends is also included in the research.
Pricing Analysis
Wholesale pricing depends on the volume demanded, customer spending level, and the number of competitors in a region. Frost & Sullivan, based on interviews with carriers has tried topresent an overview of the pricing structure in this market. The pricing trends discussed here are just for guidance purpose and do not represent pricing of any single carrier. Broadly, there are two different types of pricing structure based on the service offered.
Ethernet over SONET (EoS)
EoS is currently the most predominantly used service in the market. The service is mileage based, calculated as per DS0 mile depending on the number of DS0’s required to provide the requested bandwidth. Mileage-based pricing typically applies only to long haul services, and is based on a complicated algorithm that takes into consideration the distance, type of location, and type of routes. If many carriers have infrastructure at a particular location then pricing tends to be competitive, but in cases where carrier competition is limited, price tends to command a premium on those routes.
Therefore, the pricing structure tends to be a combination of mileage and location-specific pricing.
DS0/mileage-based pricing does not apply for metro connectivity.
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