BellSouth Corp. is the first RBOC to roll out copper-based Ethernet services. The company is using Hatteras Networks gear to provide midband Ethernet services throughout its nine-state network, the companies announced today.
“This is the first big win in the industry,” said Gary Bolton, vice president of marketing at the equipment supplier. Hatteras won BellSouth’s business because its solution delivers full Layer 2 transparency, so service providers can deliver the same services over copper or fiber facilities, he said. That’s important because fiber-based Ethernet came first, but only about 10 percent of U.S. businesses are served by fiber.
The value of the deal was not disclosed, but Bolton said based on Vertical Systems Group’s assumption that 1 million of the 3.1 million businesses BellSouth is targeting with midband Ethernet will convert from T1 and frame relay to the newer technology in the next five years, Hatteras believes BellSouth will generate at least $1.6 billion per year in service revenue from midband Ethernet, starting in 2011.
In addition to the top-line revenue, BellSouth and other carriers offering midband Ethernet realize bottom-line improvements because Ethernet is less expensive to deliver than legacy services like T1 and frame relay, Bolton added.
Although BellSouth is expected to be acquired by AT&T Inc., Bolton said AT&T hasn’t named a midband Ethernet supplier, so the BellSouth deal positions Hatteras well to be the larger carrier’s vendor of choice as well. “AT&T has strong metro Ethernet services, so this is a perfect fit for them,” Bolton said.
In addition to BellSouth, Hatteras gear is already in use with XO Communications Inc., which is using the midspan Ethernet gear in its 60 markets nationwide. Other Hatteras customers include, but are not limited to, CT Communications of South Carolina and MTS Allstream of Canada.
The 2BaseTL standards for midband Ethernet were ratified in 2004, said Bolton. The early adopters got on board with midband Ethernet in 2005 while major carriers were doing technology evaluations, he said. This year BellSouth and XO are doing major rollouts of midband Ethernet, so the service is starting to ramp, he added, and next year volume deployments are expected by more big carriers.
BellSouth Corp. www.bellsouth.com
Hatteras Networks www.hatteras.com
