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Service Provider Network Convergence

Service providers around the globe are shifting into high gear and making major investments to converge their data networks, says a new study by Infonetics Research.

Changing traffic patterns and applications are the main causes of the convergence charge, with broadband Internet, metro Ethernet, and IP VPNs being the top three drivers causing IP traffic growth for carriers participating in Infonetics' study.

"IPTV and broadcast video, which loom large in many carriers' plans, will create a huge increase in traffic when it becomes prevalent," said Michael Howard, principal analyst at Infonetics Research. "Carriers expect decreases in legacy service revenue (ATM, frame relay, leased lines), but expect big increases from IP VPN, VoIP, and metro Ethernet revenue, and those planning broadband and IPTV expect sizeable revenue increases from those services as well."

Incumbents and competitive operators face significantly different challenges and opportunities as they converge their networks, as do carriers in different regions, according to the study.

Study Highlights
- The number of carriers deploying new MPLS-based metro Ethernet equipment doubles between 2005 and 2006, from 42 percent to 84 percent
- One of the hottest market segments now and for the next five years is the cellular base station backhaul: over 50 percent offer mobile voice and data services, and of these, 73 percent build their own transport network to do the backhauling
- 100 percent of European, 60 percent of Asia Pacific, and 44 percent of North American broadband carriers are deploying IP/Ethernet DSLAMs in 2006
- Over half will participate in interprovider QoS in 2006; IP VPNs are the most common services that make use of interprovider QoS, both now and in 2006
- Creating new services is considered a challenge to 56 percent of European and 67 percent of Asia Pacific carriers, but to only 14 percent of North American carriers

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