''Triple Play'' Momentum Adds Fuel to Metro Ethernet Fire, IDC Says.

FRAMINGHAM, Mass. -- Long-time telecom equipment providers need to prepare for change as Ethernet technology, once dedicated to LAN environments, goes metro. According to new research from IDC, this shift is being driven by next-generation broadband applications, including IPTV, video-on-demand, and "triple play" services that combine video with IP voice and high-speed Internet access.

The potentially disruptive metro Ethernet equipment market reached $1.7 billion in 2004 and will increase at a 26% compound annual growth rate (CAGR) through 2009.

"The migration from a legacy network infrastructure - Synchronous Optical Network (SONET) or Synchronous Digital Hierarchy (SDH) - to metro Ethernet is well under way," said Sterling Perrin, research manager for Optical Networks at IDC. "Growth over the next five years will be substantial, and metro Ethernet represents one of the most significant opportunities in wireline telecom infrastructure." During the forecast period, the metro Ethernet equipment market will surpass that of the legacy SONET/SDH equipment market, which has long-been the workhorse of the public telecom network.

Incumbent telecom equipment suppliers will need to leverage the existing SONET/SDH infrastructure to address the Ethernet challenge. Ethernet over multiservice provisioning platforms (MSPPs), which combine the functionality of multiple networking elements, provide a less costly, more flexible network solution in the short term. Although MSPPs represent a good interim solution, major carriers will ultimately have to move away from MSPPs toward switched Ethernet networks.

Other key findings from this IDC report include:

--Cisco is well-positioned in this critical telecom equipment segment

--Asia/Pacific presents the largest opportunity for metro Ethernet subscribers and equipment revenue, driven by massive Ethernet services deployments throughout the region

--Layer 2/3 switches and routers dominate the metro Ethernet revenue opportunity

IDC's study, Worldwide Metro Ethernet Equipment 2005-2009 Forecast and Analysis (IDC #33297) forecasts the five-year revenue opportunity for metro Ethernet equipment from 2005 to 2009. It breaks down metro Ethernet equipment revenue by geographic region, including North America, Europe, Asia/Pacific, and the rest of the world (ROW). The study also breaks down the worldwide market by the major equipment segments, including Layer 2/3 switches, routers, Synchronous Optical Network (SONET)/Synchronous Digital Hierarchy (SDH) multiservice provisioning platforms (MSPPs), and metro wave-division multiplexing (WDM). The study identifies market share leaders for 2004 for the metro Ethernet equipment market as a whole and for each of the four individual equipment segments.

To purchase this study, call IDC Sales at 508-988-7988 or email [e-mail].

About IDC

IDC is the premier global market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. Over 700 IDC analysts in 50 countries provide local expertise and insights on technology markets. Business executives and IT managers have relied for 40 years on our advice to make decisions that contribute to the success of their organizations.

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