Carriers expand on-net VPN, Ethernet services to meet demand

10 Jan 2013

Enterprises around the world are upgrading and modernizing their data networks to ensure that their workers have secure and reliable access to shared applications and platforms, irrespective of whether they’re in New York or New Delhi. In response, carriers are expanding their on-net IP VPN and Ethernet service footprints, adding infrastructure in developed markets, and extending their networks into emerging markets. New data from TeleGeography’s Global Enterprise Networks reveal that availability of IP VPN and Ethernet over MPLS (EoMPLS) is growing in all world regions, but that on-net service coverage and growth rates vary widely by region.

On-net availability of IP VPN services in the 166 cities covered in TeleGeography’s research grew 12 percent in 2012. (Growth and availability reflect the percentages of carriers surveyed in 2011 and 2012 offering service in major cities in each region.) Growth was fastest in Africa, with carriers’ on-net coverage soaring 52 percent. Asia, Europe, and North America saw on-net coverage growth rates between 10 and 15 percent, while Latin America experienced marginal growth in on-net VPN coverage. On-net VPN coverage grew rapidly in Africa, but availability remains quite limited, at just over five percent. On-net IP VPN service availability in Africa is comparable to Latin America, but much lower than in Asia, with 14 percent on-net availability, or in Europe and North America, where availability stood at 18 percent.

Carriers’ aggregate on-net EoMPLS coverage grew 11 percent in 2012. EoMPLS coverage expanded most rapidly in Africa, growing 25 percent. However, on-net EoMPLS availability in the 20 African cities covered remains very low, at just one percent. While on-net EoMPLS coverage in Latin America is almost as limited as in Africa, service availability is growing far more slowly, increasing just three percent in 2012. On-net EoMPLS coverage growth in Asia, Europe, and North America grew between 10 and 12 percent. While growth rates in the three regions were comparable, on-net EoMPLS availability varies widely, from just under seven percent in Asia to 17 percent in North America.

“On-net IP VPN and EoMPLS coverage in emerging markets remains limited, due in significant part to the relatively higher costs and lower levels of demand for such services,” said TeleGeography analyst Robert Schult. “However, as new network builds drive down transport costs to emerging markets in Africa and Latin America, it will become ever more cost-effective for carriers to establish their own PoPs and to deliver service directly to enterprise customers.”

TeleGeography’s Global Enterprise Networks details the international enterprise network services offered by 88 service providers and analyzes trends in enterprise service availability and pricing. Service offerings covered include MPLS IP VPN, Ethernet, Dedicated Internet Access (DIA), and private line services.

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