PALO ALTO, Calif., May 13 --Increased demand for bandwidth from enterprise customers has contributed to the recent boom in metro Ethernet in the Asia Pacific region, says Frost & Sullivan in its report, "Asia Pacific Metro Ethernet Services Market." Revenues in this industry totaled $2.69 billion in 2002 and are projected to reach $15.24 billion by 2008, according to the market analysis firm.
Japan and South Korea are the earliest market adopters, with the most extensive metro Ethernet network in the world, said Frost & Sullivan Industry Analyst June Liang Pui San.
"With over 52 percent of the region's 2002 revenues South Korea is a clear leader. Here the general trend has been for service providers to provide the pipe, while a third-party provides the service," San said. "Service popularity and uptake is largely driven by the urban planning scenario in each country. Countries leading the way generally have two major characteristics: rapid evolution in broadband demand and large clusters of property development."
Metro Ethernet services are currently present in residential areas, where providers have teamed up with property developers, Frost & Sullivan said.
"A major factor contributing to this popularity is the fact that metro Ethernet provides a compelling replacement to asymmetric digital subscriber line and cable modem and can tap directly into the residential broadband market," according to the company.
The service is especially popular in metropolitan areas such as Hong Kong and Taiwan, where it has broken the metro bandwidth bottleneck, Frost & Sullivan reported. However, it said most end users don't think the cost of replacement is justified.
"To ensure survivability, it is essential that metro Ethernet service providers find alternative means of meeting profit margins," the company said. "One way of doing this would be to gauge the potential of the area before deploying the network. For instance, in Chinese cities, where home users make up the bulk of subscribers, the well-developed fiber infrastructure and high density is likely to boost uptake."
In Hong Kong, Singapore, and Taiwan, residential developments and the large number of multinationals are also likely to increase adoption, according to the report. "Service providers have also made such propositions attractive by bundling it with other value-added services such as broadband TV, voice telephony and IP VPN. The primary difference between the three countries is in the revenue source. In Hong Kong, service providers generate most of their revenues from residential subscribers, while in Singapore and Taiwan, the revenues are generated mainly from enterprise customers."
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