A technology called virtual private LAN service (VPLS) is helping businesses connect their global offices over a single network, while maintaining data privacy.
Speaking to ZDNet Asia about Telstra's new international Ethernet service based on VPLS technology, John Paitaridis, regional director of Telstra Global Business in Asia, said there is very "rapid deployment" of global Ethernet networks across the region.
In Japan, for instance, the Ethernet market grew by around 30 percent between 2004 and 2005, according to market research company Nomura Research.
Paitaridis said: "VPLS does provide more flexibility and cost efficiency compared to legacy data networks." He added that the technology can reduce data communication costs by up to 25 percent.
VPLS essentially allows geographically dispersed sites to share an Ethernet broadcast domain, by connecting sites through various communication platforms, including MPLS (multiprotocol label switching) and ATM (Asynchronous Transfer Mode). Customer sites connected will appear to be on the same LAN (local area network).
He explained that there are more companies looking to integrate their domestic LAN and WAN (wide area network) across the Asian region, and increasingly to the United States and United Kingdom. "That has been the driver on why we've launched this service," Paitaridis said.
He added that the demand for international Ethernet services is expected to grow as such infrastructures in many Asian countries mature. In China, for instance, major companies such as Huawei already have contracts with China Unicom and China Netcom to roll out international Ethernet services, he added.
With Telstra's international Ethernet service, businesses only pay for the bandwidth they use, as opposed to traditional fixed bandwidth packages that are typically offered by most telcos, he explained.
More importantly, there is also a clear demarcation between a customer's network and the service provider's network.
"We don't manage customers' IP packets," Paitaridis said. "They basically manage their network on their own, and we only provide the bridge to do that," he said, adding that this has attracted many banks and financial institutions to VPLS services, compared to MPLS and IP-VPN services, where service providers manage customer networks.
"They can now move to a shared platform, where they don't have to give up some elements of privacy, security and confidentiality of data, which are issues they have with MPLS," Paitaridis said.