VPLS Prices Drop Dramatically

November 27, 2012 by Leave a Comment

Prices in the marketplace are dropping as more carriers offer Ethernet Virtual Private LAN Service (VPLS).  But due to limited availability in some regions, VPLS can still be an expensive WAN option to implement.

According to a recent report by research firm TeleGeography, Western Europe and the United States saw the largest price drops for VPLS services year over year.

What helped drive down VPLS costs in Europe were two factors: availability and growing competition. Europe was the first region to deploy carrier Ethernet, meaning that VPLS is now “more widely available in Europe than in any other region.” Throughout Europe there is a growing base of incumbent and competitive players offering VPLS service.

London and Frankfurt saw a strong drop in VPLS service prices. A FastE VPLS port in London was $2,918 per month in H2 2012, while the price of the same service in Frankfurt was $1,752 per month, 39 percent less than what enterprise customers had to pay last year.  So for corporate networks that include Europe and the USA, prices are exceedingly attractive.

In markets like the key cities of South America,  there aren’t as many service options, so VPLS continues to be expensive. The median price for a FastE connection in Sao Paulo was $10,973 in Q2 2012, which is twice what a business customer would pay in New York or Los Angeles, two markets where there are multiple service provider options. Again, the issue with the prices is simply service availability. In New York, VPLS availability was 28 percent versus 6 percent in Sao Paulo.

Besides Latin America, VPLS prices in Asian cities continue to be high. The median price of a FastE VPLS port in Mumbai was $22,111 per month in Q2 2012. Although Mumbai’s VPLS prices dropped 13 percent over 2011, they are still eight times what a customer would pay for the same service in London.

There does appear to be hope with VPLS pricing.

Brianna Boudreau, a TeleGeography analyst, said that as domestic U.S. and international service providers expanded their Ethernet footprints to meet the needs of multinational clients that were moving into areas such as Latin America and India, overall “VPLS service availability increased 9 percent worldwide between 2011 and 2012.”

Boudreau added that as more players “enter the market and the service continues to mature, prices will continue to decline, and regional disparities will narrow.”

VPLS is, of course, not the only service where geography and availability dictate prices. Similar trends have been seen in local access loops and international bandwidth.

Filed Under: Industry Surveys, International Networks, VPLS Tagged With: ,

Tata Communications has launched a low latency Global Ethernet network

June 14, 2012 by Leave a Comment

Submarine cable landing in Asia

Today, Tata Communications has launched a low latency network to connect financial trading capitals in Asia, the US and the UK.

The company claims the development is the industry’s first global low latency network, offering a multipoint Ethernet platform for the financial services sector.

John Hoffman, head of Ethernet product management at the company said it is likely other global companies will make similar developments, offering multipoint solutions, if the network proves successful.

“You may now start to see more purpose-built networks created because it gives financial trading companies an option on which cable they would like to purchase capacity on,” he said. “We recognize that while we have the largest global cable network in the world, there is also a big requirement for the fastest network – and that is the basis behind such investment.”

Hoffman heralded the development as part of a new strategy from Tata, and claims it allows customers to work with a single global supplier instead of multiple country specific point-to-point network providers.

He said he believes this could serve as a better approach to low latency trading because investments often get dated with new and emerging technologies. “It is very difficult in this scenario to make large long-term investments into a single cable, because you are never sure when a faster cable is going to be built,” he said. “We didn’t want to make that single cable investment because that investment is ultimately wasted in the end – we are aiming to provide flexibility and resiliency.”

Tata confirmed to Capacity this was only phase one of its low latency project. The company aims to bring low latency connectivity in its home market India and in South Africa, where it owns a majority share in operator Neotel. This is part of a long-running strategy to tap in to other emerging markets. “We look to get into locations where there is less competition and we have a better chance of winning business,” added Hoffman.

Readers should note that this technology is available to all companies interested in low latency communication.  The key is the utilization of the most direct cable path across the globe.

Filed Under: Carriers Offering MPLS, International Networks, VPLS Tagged With: , ,

AT&T expands global Ethernet VPLS Service

December 3, 2008 by Leave a Comment

AT&T now is offering its Ethernet based virtual private local area network service (VPLS) in 14 countries across Europe and the Asia Pacific region. 

First offered in the United States, AT&T’s service now is available in Germany, the U.K., Belgium, France, Netherlands, Sweden, Ireland, Italy, Spain, Switzerland, Hong Kong, Australia, Singapore and Japan.

AT&T’s VPLS service, called OPT-E-WAN, enables businesses to link multiple locations with the “ease and efficiency of a flat Ethernet wide area network” (WAN) that now can be extended globally.

“Demand for Ethernet services worldwide continues to expand,” AT&T says. “This growth is being driven by the need that businesses of all sizes have for affordable and easy-to-manage bandwidth to support next-generation enterprise applications, including disaster recovery, storage, and converged voice and video.”

 

“Because it uses standard Ethernet interfaces, OPT-E-WAN can be configured easily to meet customer needs regardless of network configuration. And when combined with AT&T’s Multiprotocol Label Switching (MPLS) network, global customers will get the look and feel of the Ethernet they know with the reach that they require.”

Filed Under: Carriers Offering MPLS, VPLS Tagged With: , , , ,