Ethernet coverage grows rapidly, while IP VPN expansion slows

27 Feb 2014

As enterprises become increasingly reliant on their data networks to link employees around the globe, carriers are expanding their wide-area network (WAN) service coverage to meet customer requirements. New data from TeleGeography’s Global Enterprise Networks research reveal that carriers’ on-net coverage of Ethernet services, particularly Ethernet VPN/VPLS and Ethernet over DWDM (EoDWDM) grew rapidly in 2013, while expansion of on-net IP VPN service slowed.

Between 2012 and 2013, carriers deployed 236 new on-net VPLS PoPs in the 166 cities covered in TeleGeography’s survey, up 28 percent from the previous year. Growth was strongest in North America and Latin America, where carriers’ on-net coverage increased 41 percent and 40 percent, respectively.

On-net coverage of EoDWDM also increased rapidly, as carriers deployed new PoPs to meet the needs of customers with high bandwidth requirements. Availability grew 23 percent, with 99 new on-net PoPs added. On-net availability of Ethernet over MPLS (EoMPLS), the most widely offered Ethernet point-to-point technology, grew 12 percent in 2013, with carriers adding 132 new PoPs. The relatively slower growth rate reflects the more widespread availability of on-net EoMPLS service. Growth was most rapid in Africa, with on-net coverage rising 57 percent, followed by Latin America, where coverage increased 17 percent.

Carriers’ growth in on-net IP VPN PoPs declined from 12 percent in 2012 to just four percent in 2013, reflecting both carriers’ already extensive IP VPN coverage, as well as the changing nature of customer requirements. While expansion slowed sharply, carriers operated nearly 60 percent more on-net IP VPN than VPLS PoPs in the 166 cities covered.

“Carriers are channeling their investment towards Ethernet, given the already widespread availability of IP VPN service, and growing customer demand for uniform solutions across their network,” said TeleGeography analyst Brianna Boudreau. “While IP VPN remains the most pervasive enterprise network service globally, as capacity requirements continue to grow, Ethernet-based services will become ever more integral to the WAN.”

TeleGeography’s Global Enterprise Networks details the international enterprise network services offered by 116 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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