"At the basic connectivity level, Gigabit Ethernet is now very affordable so we see more 10/100/1000 megabit connections going right through to the desktop and some 10G appearing in backbones," said Edwin Ho, director, Enterprise, Greater China, Nortel. "Gigabit networks are now emerging in Hong Kong, but China is where we see rapid growth in 10G deployment."

Ho expects 2007 to see much more widespread upgrading to Gigabit Ethernet as firms add bandwidth-hungry multimedia applications to the network and keep an eye on future demand.

Gao Peng, director for the Product Division at Huawei-3Com, noted that in Hong Kong, most Gigabit networks are in use by universities and the government. He pointed to one government department recently installing 3Com switches to enable Gigabit Ethernet connections to the desktop and 10G at the core. The drivers: a growing number of power users, use of high-end applications, and additional investment protection for the future.

Inside threat

But while companies prepare to loosen the purse-strings on network building projects, capacity is not the only item on the shopping list.