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Europeans Flip for Ethernet Services

Europe is experiencing an upsurge in interest in Ethernet services among enterprise users a phenomenon that's encouraging an equivalent upsurge in activity among carriers. They're launching new offerings, expanding their networks, and acquiring existing players in an effort to catch a wave that promises to lead to a multi-billion-dollar market.

"Ethernet services have been selling like crazy since last July. It's the fastest-growing part of our business," says Nick McMenemy, head of strategy and business-critical operations at Interoute Telecommunications.

Interoute is in talks with German Ethernet service provider LambdaNet Communications GmbH about a potential acquisition (see Interoute Wants LamdaNet Assets).

LambdaNet filed for bankruptcy on February 13, ably demonstrating that offering Ethernet services doesn't guarantee financial success. Interoute is already LambdaNet's main network supplier and thinks it can reduce its infrastructure costs considerably. "It's a credible company with a strong customer base, and as a supplier, we're aware of LambdaNet's costs. We're very interested," says McMenemy.

LambdaNet's French and Spanish offshoots have already been snapped up by Cogent Communications Group Inc. (Amex: COI), an American Ethernet service provider. Cogent is shipping spare gear from the U.S. to cut its costs (see Cogent Buys the Boss's Network).

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