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Asia-Pacific Leads Ethernet in First Mile Survey

Market research firm In-Stat/MDR published a study this week titled "Ethernet in The First Mile, Like a Bridge Over Troubled Waters," which forecasts imminent growth in worldwide Ethernet in The First Mile (EFM) development.

The reference to "troubled waters," according to In-Stat/MDR Analyst Sam Lucero is because Last Mile/First Mile issues are traditionally the most problematic aspects of the networking infrastructure process.

In-Stat/MDR studied a cross-section of small and large U.S.-based companies currently developing Ethernet equipment at the system level for local subscriber access networks and determined that EFM subscribers, over any media type, are expected to balloon from 1.3 million in 2001 to 36.8 million in 2006.

Asia-Pacific will lead the charge in the market, the study concludes.

Scottsdale, Ariz.-based In-Stat/MDR attributes this surge in growth to the more pervasive availability of bandwidth in other countries, urban planning factors in Asia and Western Europe that are conducive to copper and fiber-based EFM, and the fact that Ethernet is a cheaper technology than Asynchronous Transfer Mode (ATM), which according to Lucero "is on its way out."

ATM is a network technology that transfers data in cells or packets in a fixed channel or route. Ethernet uses a bus or star topology for data transfer.

"Ethernet is the simpler technology to deploy and operate than ATM-based equipment," said Lucero. "Ethernet's relatively low cost, simplicity, flexibility, and ubiquity with high bandwidth has resulted in a growing momentum for EFM over the past year and a half."

Lucero cites companies such as Cisco , Ericsson , Extreme Networks , and smaller companies like Alloptic, Worldwide Packets, and PacketFront of Sweden as developing strong footprints in the EFM marketplace.

The study states that Asia-Pacific currently accounts for 63 percent of all EFM subscribers, a statistic that will remain high throughout the study's projected time period.

EFM residential access is on the rise among Asia-Pacific regions where broadband use is high, such as Hong Kong, Shanghai, Korea, and Japan, due in part to a heavy reliance on multi-dwelling housing, short local loop lengths, low labor costs, and government support, the study says.

Lucero added that Japan is increasingly becoming a First Mile story because of a countrywide move toward developing straight fiber-to-the-home (FTTH) as a government policy. FTTH is the installation of optical fiber from a telephone switch directly to a subscriber's home.

In China's case, the need to update its infrastructure is driving the deployment of EFM at a faster-than-expected rate, the study says.

Western Europe is also adapting quickly to EFM, particularly Scandinavia.

But according to the study, the U.S. will continue to lag behind, and EFM access will be restricted by non-standard service providers, such as public utilities and property developers, until 2006 when things may shift.

"The same factors that are hampering broadband deployment in general in the U.S. are doing the same to EFM," said Lucero. "Primarily it's that the carriers, up until now, have been faced with deploying new infrastructure and then sharing that infrastructure with competitive carriers. The impetus to move forward is lacking because of the regulatory quagmire."

Additionally, until a technological turning point in 2006, EFM delivery to consumers will largely be an Ethernet-over-copper phenomenon, the study states.

"While it is nearly as cheap to deploy fiber in greenfield developments as it is to deploy copper, the cost to overbuild with fiber is still largely prohibitive, and there is simply too much copper already in the access network for the incumbent local-exchange carriers (ILECs) of the world to ignore," states the study.

The study forecasts that it will take at least 20 years before direct FTTH becomes the mainstream residential connection to the local exchange.

Around that time, and in an ideal world, Lucero predicts that everyone will have FTTH, ultra wideband connectivity, a next-generation wireless LAN technology, and that there will be one single protocol with no translations.

According to In-Stat/MDR, EFM is currently being standardized by the IEEE 802.3ah Task Force and market awareness is being led by the newly formed Ethernet in the First Mile Alliance (EFMA).

In-Stat/MDR's study can be purchased directly form their Web site.