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Carrier Ethernet Market Defying Downturn
The carrier Ethernet equipment market is forecast by Infonetics to top $32 billion in 2013, driven by the need to handle fast-growing traffic from consumer, business, and mobile backhaul networks, including skyrocketing video traffic.
"The economic downturn favors carrier Ethernet technologies and products, as they are a less expensive alternative to legacy equipment. In fact, service provider investment in carrier Ethernet equipment is growing faster than overall telecom capex. Carrier Ethernet is one of the key technologies globally integral to IP next gen network transformation projects pushing the move from TDM to packet based networks. These IP NGN projects depend heavily on IP, MPLS, and Ethernet, and gradually will employ the use of Ethernet transport instead of SONET/SDH. Service providers spent $17 billion on carrier Ethernet equipment in 2008, and will increase their spending every year at a healthy clip over the next 5 years," said Michael Howard, Principal Analyst - Optical, Routing, Switching, and Ethernet - Infonetics Research.
The report also noted that the largest investments will be in IP core and edge routers, carrier Ethernet switches (CES), and optical gear, while Ethernet microwave is expected to be the fastest growing segment based on its use for mobile backhaul.
Many service providers use Ethernet to attract new customers with a lower cost-per-bit than traditional WAN services, and at the same time reduce capex and opex by installing a single 100M or GE link to initially sell lower speeds, but upsell to higher speeds later without changing equipment at either the CO or customer location
Mobile backhaul, rapid service provider rollout, and customer uptake of Ethernet connections and services drives the need for EADs, specialized Ethernet access devices designed with demarcation and OAM functions to deliver E-LINE and E-LAN services
Worldwide sales of EADs are forecast to increase at a compound annual growth rate (CAGR) higher than carrier Ethernet equipment in general, and much higher than the slowly growing CAGR of telecom capex
Posted to the site on 7th April 2009