Hi,
To answer the Question It depends on the Kind of storage you have, If you have iSCSI /NAS Storage then it would use the LAN to transfer the files and if your FC storage then it would use your fabric to transfer the VM files. But again even when using the FC it will use a little bit of LAN for transfer of the Snapshot Information. But the actual files will be moved using the Fabric.
If you say that it never uses more than 10% of the bandwidth, do you have any limitation on the switch for bandwidth.? what kind of storage is it.?
Thanks,
Avinash