01 September 2017
| Gareth Willmer
In many advanced Carrier Ethernet markets, the technology is getting ready to move into a fresh phase, writes Gareth Willmer.
The pace of overall growth in ports has slowed as markets
have matured, and while carriers remain committed to deploying
it as a key technology to support their services, a next stage
of development is rolling into view.
"This huge market is undergoing an exciting transformation,
moving from static connectivity to agile, dynamic, assured and
orchestrated services that are delivered over more automated,
virtualised and interconnected networks," says Stan Hubbard,
director of communications and research at industry consortium
This, then, seems to be the picture for the foreseeable
future, backed up by the recent actions of carriers to work
towards new standards. In early 2017, the MEF and TM Forum
announced a collaboration with an array of major service
providers to standardise APIs for orchestrating Carrier
Ethernet and other connectivity services across multiple
networks worldwide – a big step towards the
MEF’s so-called Third Network vision.
All this comes after the adoption of Carrier Ethernet 2.0 by
many carriers in recent years, viewed as a foundation for
future innovation. The MEF reports that about 95 service
providers from 28 countries now offer CE 2.0-certified
services, with adoption having spread worldwide, including in
Today, believes Hubbard, the most innovative players for the
next stages are those focusing on the delivery of on-demand
Carrier Ethernet services, NFV-based services and hybrid
offerings that include SD-WAN managed service options.
"This is driving greater adoption and increasingly allowing
carriers to buy wholesale services from each other to reach
endpoints with end-to-end Ethernet services for their
customers," says Jim Daugherty, assistant vice president,
product management for enterprise network services at
Daugherty adds that he still sees strong demand for
customers wanting to move from TDM-based services and growth
driven by new applications. "Some of the migration is to
broadband internet, but Ethernet has continued to capture a
Some say that growing technologies such as SD-WAN could dent
the growth of Ethernet services in competition with them. But
the picture is not straightforward because these technologies
can conversely work in tandem too.
"Ethernet faces indirect competition from other techn
– like SD-WAN, MPLS and dark fibre – in
certain use cases," says Rick Malone, a principal analyst at
Vertical Systems Group. "However, because each of these
interoperates with Ethernet, they are more likely to be
complementary than competitive."
"Even if business customers are migrating to SD-WAN with the
option of internet-based access, Carrier Ethernet is still used
for premium access with high bandwidth and high availability,"
adds Erik Uchytil of the product management data department at
Telekom Austria Group. "Carrier Ethernet is also used for other
products like direct internet access, and in the wholesale
sector as the underlying network technology for other carriers
expanding their MPLS networks."
So rather than just pure physical deployments of Carrier
Ethernet, providers are set to focus on how things are built on
top and how the services enabled by the technology are consumed
going forward. Even so, carriers say there is still plenty of
room for growth in roll-outs too.
Malone says the market in the US and other early-adopting
countries is still seeing double-digit growth per year, even
though, for example, the rise in retail ports in the US has
slowed from the "market ramp" years of over 30% annual growth
between 2006 and 2015. This has occurred as many large
enterprises have completed the move from legacy services to
Ethernet for corporate networking and cloud connectivity.
Malone also points out that some other markets are ramping
up at much higher growth rates and that carriers continue to
expand to unserved regions. "Globally, there are several
untapped markets that do not currently have the infrastructure
to support high-speed services," he says. "As these areas are
developed, Carrier Ethernet will be a technology of choice for
One carrier seeing opportunity in expanding its Carrier
Ethernet platform internationally is Level 3, which ranks among
the top few carriers both globally and in the US in terms of
port volumes, according to Vertical Systems Group data.
Carrier Ethernet is something on which Level 3 has placed "a
very big bet", says Chris McReynolds, VP of core network
services at the company. This has been boosted by the
company’s 2014 acquisition of tw telecom, which
McReynolds says was already fairly advanced in Ethernet
Over the last 18 months, Level 3 has launched new dynamic
Carrier Ethernet services based on 2.0 standards in Europe and
Asia-Pacific, in a move towards delivering a single, ubiquitous
Ethernet platform to enable consistency across its global
network – giving the technology fresh growth prospects
in these regions. A later aim is to bring the
company’s Latin American footprint up to speed
Side by side with consistency in its own network, McReynolds
says that as more global carriers adopt new standards, it
becomes easier to coordinate and automate Carrier Ethernet from
a wholesale perspective because services then work like people
expect. He believes the push towards standards for
orchestration is shifting things in the right direction for the
future, but there is still a way to go to get everything
working together between carriers. "There’ll be
growing pains, but you have to go through those to get to the
end place," he says.
Henry Bohannon, director of data and broadband products at
BT Wholesale, also says the future of Carrier Ethernet is in
more agile networking, making use of technologies such as SDN
and NFV to allow more dynamic services – allowing
customers to provide more integrated solutions to end-users.
The company has also just started trialling Ethernet access
over 4G mobile, which Bohannon says is a "new innovation" that
is set to give customers more choice of access.
"As we evolve, I would see greater integration between
Ethernet and the data centre world, to allow dynamic
capabilities, but also to optimise the network in terms of
getting the best latency and performance –
particularly as we move towards 5G networks," says
One of the things to bear in mind for BT Wholesale, he says,
is the need with the next phase of services to accommodate and
coordinate between both its larger customers and smaller
resellers, which will want to consume services in different
Meanwhile, for PCCW Global, Carrier Ethernet remains a
"fundamental building block" of the company’s
portfolio, says Shahar Steiff, AVP of new technology. Its value
among today’s technologies, he says, is that
Carrier Ethernet offers a unique mix of manageability and
Says Steiff."With the move towards managed services and
bundled services, Carrier Ethernet will gradually evolve from a
connectivity service being delivered independently into a
building block in a more complex structure," he adds.
Greg Harris, a senior manager at Verizon Partner Solutions
stresses the need for innovation for carriers to realise the
promise of future dynamic carrier Ethernet services.
Harris explains: "In the coming years, those providers that
can leverage Carrier Ethernet as the foundation with a solid
SDN and NFV implementation will reap the rewards of new service
revenues at reduced cost points."
Time to make a move
Going forward, many carriers believe that the new proposed
standards could lead to new opportunities for themselves and
customers. "There are tremendous customer experience benefits
and operational efficiencies for carriers with these new Third
Network capabilities and services," says Parimi Satya, general
VP for spectrum data at Spectrum Enterprise.
And the MEF’s Hubbard describes the future of
the market as "incredibly promising", but stresses that
providers will also need to be nimble in both their strategies
and investments to take advantage of the
He says the players to watch in the next chapters of the
Carrier Ethernet story will be those involved in developing and
implementing a wide range of inter-provider LSO APIs. "These
providers essentially will form the core of a global ecosystem
of service providers who are able to orchestrate on-demand
services across each other’s networks."