Last month, IIR held its first-ever MEF Congress in Latin America, Carrier Ethernet World Americas (CEW Americas). Although smaller in size than its sibling events in Europe and Asia Pacific, CEW Americas is the largest conference and exhibition for Ethernet networking and services professionals in the Latin America region. And for good reason: there’s a lot of uptake and activity surrounding Ethernet technology in the region. To hear more about this, we sat down with Rafael Francis, ECI’s AVP of Technology and Marketing in the Americas, for a quick Q&A session. Enjoy!
Q: Rafael, you recently presented at CEW Americas in São Paulo. What are some of the Carrier Ethernet services and trends that are emerging in Latin America?
A: The growth potential for Ethernet services in Latin America is huge. The market there has been slower to grow than elsewhere, but now deployments are accelerating. Typical services are for businesses to replace traditional leased lines with Ethernet private line services (ELINE), and new multipoint services like ELAN are being introduced as well. Deployment of Ethernet as a broadband aggregation technology for residential customers is also becoming more common, as it will pave the way for higher speeds and IPTV services. Mobile backhaul is yet another area where Ethernet is taking hold. We spoke with one operator in Colombia that already backhauls 400 cell towers over Ethernet – and they are expanding. Typically, Latin American deployments are skipping ATM deployment for backhaul of mobile broadband and going straight to Ethernet.
Q: Mobile backhaul wholesale services are expected to see healthy growth in Brazil. For whom do the opportunities exist, and why?
A: The wholesale business for mobile backhauling is expected to be healthy in Brazil as in the U.S. since the large telco/mobile providers like Telefonica/Vivo and Telmex/Claro don’t want to buy backhauling service from each other out of territory for competitive reasons. This presents opportunities for wholesalers like Copel and Global Crossing.
Q: A recent Infonetics Research report stated that operators’ revenue from Ethernet services has overtaken that of IP VPN services. What is the reason for this trend?
A: First, it’s important to point out that one size does not fit all when it comes to Ethernet/IP services. Some businesses will prefer one or the other for various reasons, so both Ethernet and IP VPNs will continue to coexist. However, the greater growth rates of Ethernet services can be explained by a variety of factors. First, Ethernet is a technology that enterprise companies are very familiar with as they use it within their own networks. Ethernet services are simple. Next, price per megabit is likely to be less because service providers don’t have to manage the IP routing topology like they do with IP VPNs. Yet, some businesses may want to outsource their routing, and they may have a variety of WAN technologies they are using in addition to Ethernet including Frame and ATM which IP VPNs can support.
Q: There’s been talk of a new government broadband initiative in Brazil. What’s the latest on this?
A: This was just recently announced. We have seen similar initiatives elsewhere in the world – for example, the U.S. broadband stimulus program, or the National Broadband Network (NBN) in Australia. The idea is not only to speed up the roll-out of broadband, but also to subsidize those areas where it is not attractive for service providers to invest in infrastructure. This presents a great opportunity for solution providers like ECI, and we’re monitoring the status of the project closely.
Thanks Rafael. It’s great to learn about the good things going on in the region, and we look forward to hearing more in the coming months.