Central and Eastern Europe are emerging as major growth hotspots for carrier Ethernet systems as incumbent and competitive carriers build out new networks and launch new residential and enterprise services.
The region, stretching east from the Czech Republic and including major growth markets such as Poland and Russia, is becoming increasingly attractive for all sorts of vendors, as emerging economies, especially those that have recently joined the European Union, invest in their communications infrastructure.
And, as emerged at this week's Carrier Ethernet World Congress, held in Geneva, Switzerland, as carriers of all types, from incumbents to broadband startups, plan their investments, they're often skipping generations of technology and deploying state-of-the-art optical, IP, and Ethernet infrastructure.
Jan Hof, director of field marketing for EMEA and Latin America at Ethernet switch vendor Extreme Networks Inc. says his company is experiencing increasing interest from carriers in the region that are investing in new IP-centric networks.
Hof says competitive carriers and incumbent operators are using Ethernet switches to deliver enterprise connectivity services; for service aggregation; and, where fiber access is being deployed, to support residential access traffic as well.
Extreme has already been deployed by one optical access competitive carrier in Slovenia, T2, which is challenging incumbent Telekom Slovenije . While the vendor has not yet issued an official announcement about the deal, Extreme's CEO, Gordon Stitt, noted in his fourth-quarter 2006 earnings call that T2 has deployed a range of the vendor's switches to build an "Ethernet backbone to support triple-play services [that] reach thousands of customers and deliver video, data, and voice with preferential treatment of traffic."
Extreme is also targeting the region's national operators, though incumbent and Tier 1 carrier opportunities and engagements are mainly handled by the vendor's main European partners, Ericsson AB and Nokia Siemens Networks.
Demand from competitive carriers is handled from Extreme's offices in Poland, Russia, and Switzerland (which manages opportunities in Southeastern Europe).
David Collins, head of business development in Central and Eastern Europe for Ethernet-over-copper system vendor Hatteras Networks Inc. , has lived in the Czech Republic for a number of years, and he's seeing first-hand how demand for reliable Ethernet access services is growing.
He says the region is home to a growing number of Internet-based companies, such as recruitment firm Jobs.cz; software companies like IBM Corp. and Microsoft Corp., which need highly qualified, English-speaking staff in markets with uncomplicated employment laws; and traditional manufacturing firms that find the cost of doing business in developed countries too high.
Companies have two options when they locate in a country such as the Czech Republic, notes Collins. They can take space in expensive buildings that have optical connections and can therefore deliver high-bandwidth access, or they can find low-rent buildings that have copper connections.
"These companies need access connections of 10 to 20 Mbit/s but to low-cost buildings," he says. That can be delivered by fixed-line operators in two ways -– using VDSL2 if the copper loop is short enough, or using Ethernet-over-copper technology from players such as Actelis Networks Inc. , ADVA Optical Networking , and Hatteras that can deliver access speeds of up to 45 Mbit/s.
That scenario has driven new business for Hatteras in Hungary with incumbent Magyar Telekom Plc , a subsidiary of Deutsche Telekom AG ; a deployment and a "major trial" in Poland; and a trial with Telefónica O2 Czech Republic , according to Collins.