A C C E S S F O R A C O N V E R G I N G W O R L D
Forecasts aggregated from across the telecommunications
industry highlight clearly the magnitude of these changes
in non-residential wireline and cellular data traffic —
with 32% and an astounding 125% compound annual
growth rates, respectively. Given the relatively slow
growth in the population of SMOs and cell sites, the
traffic per location looks set to continue rising substan-
tially.
The Opportunity in Last-Mile
Copper
While the telecom industry’s response to demand for
higher bandwidth is generally to push fiber closer to the
customer premise, for SMOs and many cell sites, there
are complications with that approach. While the forecast
traffic growth rate in these segments is substantial, it’s
starting from a very small base — typically something on
the order of a 1.5 Mbps T1 or 2.0 Mbps E1 data service
line. For these smaller sites, it will take years of steady
traffic growth to reach the point where service demand
and willingness to pay will justify the high costs of
running fiber to these premises. Unlike residential
neighborhoods where the cost of fiber deployment can be
more easily amortized over a number of subscribers, the
lower teledensity of SMOs and cell sites means the fiber
deployment business case for an individual location must
bear the full installation costs largely alone. Given these
realities, the slow rate of growth in fiber penetration to
businesses is unsurprising. One industry analyst, Vertical
500
1,000
1,500
2,000
2,500
2009
2010
2011
2012
2013
Non-Residential
Wireline
(32% CAGR)
Cellular Data
(125% CAGR)
100
IP Traffic Forecast
(Normalized to 2009 = 100)
500
1,000
1,500
2,000
2,500
2009
Source: Cisco VNI 2009
2010
2011
2012
2013
Non-Residential
Wireline
(32% CAGR)
Cellular Data
(125% CAGR)
100
IP Traffic Forecast
(Normalized to 2009 = 100)
100%
Fiber
Copper
Last-Mile Fiber Penetration in SMO market.
2006
2008
Source: Vertical Systems Group
Systems Group, reported in 2006 that only 13.4% of
businesses in the US were served by fiber. Two years later
their 2008 survey found just 19.1% penetration of fiber
connections in the business segment. The business case
for fiber deployment to these segments is obviously
improving, but at a modest rate that will leave the large
majority of these customers limited to copper-based
solutions for some time.
EFM Technology
Fortunately there is an excellent solution for these copper-
bound SMO and cell site applications in the form of
Ethernet over Copper, and in particular the industry-
standard Ethernet in the First Mile technology (common-
ly referred to as EFM).
EFM in Context
To clarify terminology, it’s helpful to look at EFM in the
general context of the growing adoption of Ethernet.
Since Ethernet is taking different forms in access, distribu-
tion, and core networks, the jargon can be confusing.
The table on the next page provides a summary snapshot
of the various Ethernet technologies in use today outside
the LAN environment. The overlap between the applica-
tion groupings (the horizontal axis) is the primary source
of confusion. The IEEE 802.3ah standard, the more
formal name for EFM, actually covers both fiber and
copper technologies. In practice, though, the term
“Active Ethernet” is used for 802.3ah standards over
point-to-point fiber, leaving EFM as the working term for
802.3ah over copper. The higher-speed Metro Ethernet
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