What is Ethernet? - All you need to know - Neos Networks

What is Ethernet?

Ethernet is a technology that connects devices to local area networks for fast data transmission. Is it right for your business?

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Ethernet cable being plugged into networking device

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What is Ethernet?

Ethernet is a networking technology that connects devices by cable to local area networks (LANs) for high-bandwidth data transmission. For example, if you plug your desktop computer or laptop into a router at home or work, you use Ethernet to connect to the network.

Since it’s a wired connection, Ethernet typically provides higher speeds, lower latency, and greater security than Wi-Fi (WLAN).

Ethernet cable plugged into a home router

An Ethernet cable plugged into a home router


When first introduced in the 1980s, Ethernet delivered speeds of 10Mbps for local networks. Since then, it’s evolved into Carrier Ethernet, which offers speeds of up to 100Gbps or more over long distances.

Today, Ethernet is used in a wide range of applications, from small home LANs to large enterprise wide area networks (WANs) and metropolitan area networks (MANs). It forms the backbone of many wired communication networks worldwide.

How does Ethernet work?

Ethernet divides data into small chunks called frames, which are transmitted over standardised cables. Ethernet works primarily at the data link layer (layer 2) of the OSI model, with some elements operating at the physical layer (layer 1).

The seven layers of the OSI Model

# Layer Function
7 Application layer Enables humans or software to interact with the network through applications like file sharing, email clients and databases
6 Presentation layer Formats, encrypts and decrypts data for the application layer
5 Session layer Starts, maintains and ends connections between applications
4 Transport layer Transfers data across the network, for example, using TCP or UDP transport protocols
3 Network layer Enables communication between multiple networks and determines the data’s path, for example, applying IP addresses
2 Data link layer Manages connections between physically connected nodes on a network
1 Physical layer Transmits raw data bits over physical media like cables or wireless connections


At the physical layer, Ethernet typically uses twisted-pair copper or fibre optic cables to connect devices. For example, below is a twisted-pair Ethernet cable with a standard RJ45 connector.

Ethernet cable and RJ45 connector

A Cat5e twisted-pair Ethernet cable with a standard RJ45 connector


At the data link layer, Ethernet defines the protocols used to transmit data between connected devices as follows.

MAC addresses

Ethernet uses 48-bit Medium Access Code (MAC) addresses. MAC addresses uniquely identify devices on the network.

Ethernet frames

To transmit data, Ethernet packages data into frames containing the source and destination MAC addresses, error-checking data and other standard information. Only devices on the network with the matching destination MAC address will process the frame.

Collision handling

In traditional Ethernet, if two devices transmit data simultaneously, a collision occurs. To prevent this, devices ‘listen’ to the network to see if it’s free. They use CSMA/CD (Carrier Sense Multiple Access with Collision Detection) – an algorithm that allows frames to be retransmitted without collisions.

Today, modern Ethernet networks use switches to forward frames to MAC addresses on the network, reducing collisions and enhancing performance.

In addition, ‘full-duplex mode’ allows devices to send and receive data simultaneously, doubling the network bandwidth. The total available bandwidth of an Ethernet network depends on the standard used.

Ethernet standards

First standardised in 1983 as IEEE 802.3, Ethernet initially used thick coaxial cables to transmit data at a maximum of 10Mbps over a few hundred metres (10BASE5). This was a shared medium, meaning all devices were connected through one channel on a single cable.

Since then, Ethernet has evolved to use twisted pair and fibre optic cables with switches to forward data to the destination device. Today, Ethernet standards include Fast Ethernet (100Mbps), Gigabit Ethernet (1Gbps) and 10 Gigabit Ethernet (10Gbps) – see table below for details.

Common Ethernet standards

(Note: Multimode fibre optic cables divide optical wavelengths into multiple paths for different channels; single-mode fibre cables feature a single path for longer distances.)

Ethernet standard IEEE specification Max speed Max distance Common name
10BASE5 802.3 10Mbps 500m (coaxial) Thicknet
10BASE2 802.3a 10Mbps 185m (coaxial) Thinnet
10BASE-T 802.3i 10Mbps 100m (twisted pair) 10 Megabit Ethernet
100BASE-TX 802.3u 100Mbps 100m (twisted pair) Fast Ethernet
100BASE-FX 802.3u 100Mbps 2km (fibre optic, multimode) Fast Ethernet
1000BASE-T 802.3ab 1Gbps 100m (twisted pair) Gigabit Ethernet
1000BASE-SX 802.3z 1Gbps 550m (fibre optic, multimode) Gigabit Ethernet
1000BASE-LX 802.3z 1Gbps 5km (fibre optic, single-mode) Gigabit Ethernet
10GBASE-T 802.3an 10Gbps 100m (twisted pair) 10 Gigabit Ethernet
10GBASE-SR 802.3ae 10Gbps 300m (fibre optic, multimode) 10 Gigabit Ethernet
10GBASE-LR 802.3ae 10Gbps 10km (fibre optic, single-mode) 10 Gigabit Ethernet
40GBASE-T 802.3bq 40Gbps 30m (twisted pair) 40 Gigabit Ethernet
40GBASE-SR4 802.3ba 40Gbps 150m (fibre optic, multimode) 40 Gigabit Ethernet
40GBASE-LR4 802.3ba 40Gbps 10km (fibre optic, single-mode) 40 Gigabit Ethernet
100GBASE-SR10 802.3bj 100Gbps 100m (fibre optic, multimode) 100 Gigabit Ethernet
100GBASE-LR4 802.3bj 100Gbps 10km (fibre optic, single-mode) 100 Gigabit Ethernet


The latest standards can support speeds up to 400Gbps (IEEE 802.3bs), and 800Gbps and 1 Terabit Ethernet are currently under development.

Most Ethernet-enabled devices are backwards compatible with lower-speed Ethernet standards. However, the maximum connection speed will be limited to that of the slowest network component.

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Ethernet components

Ethernet uses several standardised components that work together to enable data transfer. Here are some of the key elements of an Ethernet network:

  • Network interface cards (NICs): Also known as network adapters, NICs are components in devices like servers, computers and printers that allow them to ‘talk’ to an Ethernet network.
  • Ethernet cables: Cables physically connect devices to the network and come in various categories depending on the bandwidth required. For example, twisted-pair Category 5e (Cat5e) and Category 6 (Cat6) cables are commonly used for Gigabit Ethernet. Fibre optic cables are used for longer distances.
  • Ethernet ports and jacks: Ports are the physical sockets on devices that Ethernet cables plug into using a standard RJ45 connector (see image above); jacks are the wall sockets that allow you to plug into an Ethernet network, for example, at work.
  • Switches: Switches connect multiple devices to a network and manage data traffic. As they only forward data to the destination device, they reduce data collisions and improve network efficiency.
  • Hubs: A legacy component in older networks, hubs connect multiple devices to a network. But unlike switches, they broadcast data to all devices on the network, so they’re less efficient.
  • Routers: Routers connect different networks, such as LANs, to the internet. They assign IP addresses, route data traffic and ensure network security.

As components are standardised, Ethernet networks are often ‘plug-and-play’ with little or no setup required – one of several advantages of Ethernet connectivity.

Why use Ethernet connectivity?

Ethernet is widely used in various business applications due to several key advantages. Here are the main benefits of Ethernet.


Ethernet provides low latency, high-speed data transmission up to 100Gbps or more. That’s ideal for large file transfers or tasks requiring near real-time data exchange, like video conferencing, financial transactions, cloud applications or other mission-critical networks.


Ethernet components are widely available, relatively cheap, and easy to install. So Ethernet can deliver high capacity connectivity at a relatively low cost.


Ethernet network speeds are easy to scale up as you grow. And you can usually add devices to the network by connecting Ethernet cables and switches with minimal setup.


Ethernet networks are less susceptible to interference or disruption than wireless connections. In addition, good business Ethernet services typically offer Service Level Agreements (SLAs) guaranteeing network uptime.


Compared to wireless local area networks (WLAN), Ethernet networks are less vulnerable to unauthorised access. Access to Ethernet ports is easier to control than wireless access points.


Since Ethernet is a widely adopted standard, almost all computers, printers and network storage devices support it. This standardisation ensures compatibility between devices from different vendors.

Given its versatility and high bandwidth, Ethernet today is not only used for local and wide area networks. It’s also ideal for data-hungry tasks like connecting data centres, IoT applications, cloud services, and telecoms backhaul and backbone networks.

Types of business Ethernet services

Various Carrier Ethernet services provide high-bandwidth data transmission for enterprise applications. Below are the main types of Carrier Ethernet services, as defined by the Metro Ethernet Forum:

Carrier Ethernet services

Service type Topology Description
E-Line (Ethernet Line Service) Point-to-point or point-to-multipoint Directly connects two business sites
E-LAN (Ethernet LAN Service) Multipoint-to-multipoint Allows multiple sites to exchange data directly with each other
E-Tree (Ethernet Tree Service) Rooted multipoint Connects a central site to multiple sites, but the “leaves” (branch nodes) of the tree don’t exchange data directly
E-Access (Ethernet Access Service) Network-to-network Provides a local access connection to another carrier’s network


Good network service providers typically offer various business Ethernet services based on these standards.

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Choosing a business Ethernet service

Which service is right for your business depends on your specific needs. At Neos Networks, we offer a range of business Ethernet services you can scale up to 100Gbps. Here are some services we can configure for your business.


If you’re a larger customer and want to connect multiple premises back to your network, an Ethernet network-to-network interface (NNI) could be ideal. With point-to-NNI connectivity, you can connect your sites as efficiently as possible at bandwidths you can scale.

Ethernet point-to-NNI

Point to NNI Ethernet showing a customer NNI connecting to multiple customer premises via Neos Networks national fibre network and third-party access tails


Point-to-point Ethernet

If you need a high-bandwidth, low latency connection between two locations, Ethernet Private Line (EPL) is a good choice. A kind of E-Line service, EPL provides Ethernet point-to-point (P2P) connectivity between a pair of dedicated user network interfaces (UNIs).

EPL point-to-point Ethernet

Example of an Ethernet point-to-point service, Neos Networks EPL, showing a direct, dedicated Ethernet link between two customer premises via the Neos Networks cloud and third-party access networks


Point-to-multipoint Ethernet

If you want to connect multiple sites, Ethernet Virtual Private Line (EVPL) may be for you. EVPL is a type of E-Line service that supports point-to-multipoint (P2MP) connectivity by enabling multiple Ethernet Virtual Connections (EVCs) per UNI.

EVPL point-to-multipoint Ethernet

Example of an Ethernet Virtual Private Line service, Neos Networks EVPL, showing a dedicated Ethernet link between one customer hub and multiple customer premises via the Neos Networks cloud and third-party access networks


Any-to-any Ethernet

If you need flexibility to link any of your premises to any other, Virtual Private LAN Service (VPLS) could be ideal. VPLS connects multiple sites in a single domain through IP routing or MPLS.

VPLS any-to-any Ethernet

VPLS any-to-any Ethernet network connecting any customer premises to any other customer premises in the network


Overall, which Ethernet service is right for your business depends on your specific use case, budget, and plans for future growth. If you’d like to discuss which is best for your business, get in touch. We’ll be happy to make Ethernet work for you.

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Ethernet FAQs

  • What is Ethernet connectivity?

    Ethernet is a networking technology that connects devices by cable to local area networks (LANs) for high-bandwidth data transmission. For example, if you plug your desktop computer or laptop into a router at home or work, you use Ethernet to connect to the network. Ethernet is used in a wide range of applications, from small home LANs to large enterprise wide area networks (WANs) and metropolitan area networks (MANs).

  • What is Ethernet over FTTx?

    Ethernet over FTTx is a hybrid Ethernet connectivity solution. It enables businesses not yet ready to make the leap to full fibre Ethernet to take advantage of its benefits but at more manageable capacities. Learn more about our Ethernet over FTTx service.

  • What is Ethernet First Mile?

    Ethernet First Mile (EFM) is a popular and affordable way for businesses to get easy, dedicated connectivity that delivers fibre-like connectivity using copper cables already in place and can enable speeds up to 30Mbps – dependent on the length of copper cable needed and how many pairs are used. We provide a breakdown on what Ethernet First Mile is and highlight its top three advantages.

  • MPLS vs SD-WAN

    Multiprotocol Label Switching (MPLS) has been popular for several years now and is very good at providing robust and reliable connectivity as well as ensuring critical business information continues to flow, but it’s flexibility has also become a limiting factor. Learn more about the difference between MPLS and SD-WAN.

  • EPL vs EVPL

    Ethernet Private Line (EPL) and Ethernet Virtual Private Line (EVPL) are Ethernet services defined by the Metro Ethernet Forum (MEF) and fall under their Ethernet services category ‘E-Line’. Both EPL and EVPL Ethernet provide the simplicity of private connections combined with the flexibility and scalability of MPLS technology across a range of bandwidths, but the main difference for businesses is the configuration they would require.

  • MPLS vs Dark Fibre

    MPLS can offer robust and reliable connectivity, yet Dark Fibre offers a level of network future-proofing that other means of connectivity can’t. Learn more about MPLS vs Dark Fibre.

  • Ethernet vs Dark Fibre

    Ethernet for business is where the bandwidth required is leased from a connectivity provider who manages the network. In contrast, Dark Fibre refers to fibre that is unlit and unmanaged but owned or leased wholly by the business purchasing it. Learn more about Ethernet vs Dark Fibre.

  • What’s the importance of a point-to-point network?

    A point-to-point network gives organisations secure and private connections, for transmitting internal or sensitive data. They are particularly useful for businesses operating over multiple sites, who have to integrate networks and communications, including such bandwidth-hungry activities as video conferencing. While some organisations can achieve this integration via the public internet, larger companies may face issues with security, privacy and bandwidth, as well as the network's reliability. 

    A leased line can provide a solution to these issues, but you may find a point-to-point network is more suitable and, possibly, more economical.

    If your company needs a high capacity, private network to do business, the importance of a point-to-point network cannot be overestimated. Choose the right provider and you’ll get a reliable, high-speed connection perfectly suited to your organisation, at speeds from 10Mbps to 10Gbps.

  • What is the benefit of a point-to-point leased line?

    As well as providing a reliable, private connection, a point-to-point network will give your business a whole host of benefits. One of the most important is speed, with point-to-point networks taking your data along the most direct route possible. Allied to this, upload and download speeds are guaranteed and you won't have any concerns about bandwidth because the connection is private and dedicated.

    Common applications for point-to-point networks include file sharing, data backup, point-to-point VOIP and video-conferencing, all of which take advantage of the direct, high capacity nature of these networks. These networks are ideal for a range of everyday business needs, helping your organisation to work more efficiently.

  • What is a point-to-point circuit?

    This type of private data connection links multiple locations. As a closed network data transport service, it doesn’t use the public internet, making it secure enough to not require any data encryption. 

    Another advantage of this type of connection is the high quality of service: private lines always follow the same direct pathway and don’t have any competing connections on the same line. This means they’re completely reliable as well as secure, making them attractive for companies conducting credit card transactions and similarly sensitive operations. They’re also desirable for organisations transmitting large amounts of data, with many providers offering unlimited data usage.

    Point-to-point circuits are available at different speeds and bandwidths. As a result, they’re as flexible as they are reliable. Learn more about point-to-point Ethernet.