Qwest Debuts National Point-to-Point Ethernet with Flexible Ports and Lower Costs

Event Summary

January 11, 2011 – Qwest has launched its new Qwest iQ E-Line service, a dedicated private line replacement that uses Ethernet over MPLS and DWDM. The service offers speeds ranging from 5 Mbps to 1 Gbps; its secure connectivity can be used by enterprise customers and wholesale partners for long-haul/metro applications, including data center connectivity, storage area networking, and disaster recovery/business continuity. The service is currently available in 16 major markets nationwide.

Quick Take

Analytical Summary

• Current Perspective: Moderate on Qwest’s release of the Qwest iQ E-Line service, because the move represents progress for the company's national Ethernet portfolio, but it also underscores Qwest's need for more sophisticated Ethernet virtual private line (EVPL) and virtual private line service (VPLS) Ethernet options for its customers. Qwest's 16-city reach includes the nation's largest destinations, but the company will need more E-Line PoPs to meet enterprise customers' more diverse coverage needs.

• Vendor Importance: High to Qwest, because iQ E-Line service is the first of what is likely to become a series of new service releases on the carrier's new Alcatel-Lucent optical and networking infrastructure. Significantly, only two of Qwest's 16 announced markets are inside its own 14-state ILEC territory (Denver and Phoenix), which shows that iQ E-Line was designed to meet the needs of national wholesale and enterprise customers more so than in-region customers.

• Market Impact: Moderate on the Ethernet services market, because Qwest iQ E-Line is best suited for point-to-point private line replacement, and it may also compete against some wholesale IP transit applications. While Qwest has rudimentary VPLS Ethernet capability, the carrier's national Ethernet portfolio does not yet directly threaten competitors' more sophisticated long-haul EVPL and VPLS Ethernet offers.

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