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This week in telecom news, the Cloud Ethernet Forum announced it is building a cloud services network testbed for providers and vendors to develop standards for cloud services. The group plans to release its first set of standards by the end of the year. Meanwhile, a new report found that enterprises are slow to adopt 100 Gigabit Ethernet (100 GbE), despite the need for greater bandwidth support. However, 25GbE may give enterprises the boost they need.
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Sprint's attempt at a T-Mobile acquisition failed, leaving the T-Mobile's future in the U.S. up in the air. Parent company Deutsche Telekom does not believe the nation's fourth-largest mobile carrier can compete against market leaders Verizon and AT&T, and is seeking offers from other carriers and telecom providers.
Cloud Ethernet Forum builds network testbed for cloud-based services
The Cloud Ethernet Forum (CEF), formed a year ago, is building a cloud services network testbed south of San Francisco, where service providers and vendors will develop standards for cloud services.
The CEF is a sub-group of the Metro-Ethernet Forum (MEF) and focuses on cloud services that are bought and sold, just as the MEF focuses on driving Carrier Ethernet. The CEF is planning to release its first set of cloud Ethernet service standards by the end of 2014, which will be known as Cloud 1.0. The standards are being created to address five areas needed for cloud development: virtualization, automation, security, programmability and analytics.
The Open Cloud Project, which went live in late July, combines live commercial service provider traffic with some networking and computing equipment, in order to test new technologies designed to make cloud services easier to set up and manage.
CEF president James Walker, vice president of managed services with CEF-member company Tata Communications, said the Forum needs to work faster than the usual five to seven years it takes traditional standards bodies because cloud computing evolves so quickly. The group plans to launch its initial standard and then update it every six to eight months with additional features, according to PC World.
CEF member companies include Comcast Business, Verizon, Tata Communications, Alcatel-Lucent, Cisco, Juniper Networks, Huawei, Ciena, among others. --Kate Gerwig
100 GbE adoption slow, but steady
Rising bandwidth demands to support enterprise video, mobility and cloud services have increased the need for 100 GbE, but enterprises are reluctant to adopt it, according to the latest report from Heavy Reading.
Adoption of 100 GbE remains slow mainly due to high equipment prices, and enterprises favor lower cost, multiple 10 GbE circuits instead, according the report. Equipment prices are expected to gradually decline over the next few years, and as equipment costs decrease, adoption rates will grow, with revenues from 100 GbE projected to reach $275 million by 2017.
Upgrading to 40 GbE, on the other hand, will remain a niche play among regional enterprise buyers, according to the report.
Current efforts to develop standards for 25 GbE and 50 GbE may meet enterprise needs for more bandwidth without the extra cost of adopting 100 GbE, which is a bundle of four 25 GbE lanes. According to the 25 Gigabit Ethernet Consortium, the move to 25 GbE will make the eventual adoption of 100 GbE easier because the upgrade is simpler and more cost-effective than migrating from 100 GbE to 40 GbE.
New 25 GbE and 50 GbE products are expected to enter the market in the next 18 to 24 months, and cloud providers are anticipated to be among the first groups to adopt.
T-Mobile's future in the U.S. unclear
Deutsche Telekom has to decide whether or not to stay in the U.S., after Sprint dropped its bid to acquire its T-Mobile subsidiary. CEO Timotheus Höttges said the mobile carrier has yet to receive offers that exceed its standalone value, including a rejected bid by French telecom provider Iliad S.A.
"We're open to a transaction that creates value for all T-Mobile U.S. shareholders, compared with continuing the business on its own," Höttges said in an earning's call. "Right now, there's no such offer on the table."
Japan's Softbank, which owns Sprint, and German provider Deutsche Telekom had reached a $32 billion deal in June that would have combined the third- and fourth-largest mobile carriers in the U.S. Sprint dropped the bid last week over fears that federal regulators would not approve the deal.
Federal Communications Commission (FCC) Chairman Tom Wheeler said the dropped bid was good for consumers. "Four national wireless providers are good for American consumers," he said in a statement.
Deutsche Telekom does not believe that T-Mobile can compete with market leaders Verizon and AT&T, and that the operator will need regulatory help to successfully compete against the mobile giants at the FCC's 2015 spectrum auction. Höttges said the slump in Sprint and T-Mobile's stocks after Sprint dropped its acquisition bid "couldn't have been a clearer signal."