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With metro-area and wide-area Ethernet services readily available from virtually all major data service providers,the market is expected to grow at a compounded rate of almost 25%, increasing from $3.1 billion in 2010 to reach nearly $9.7 billion by 2015.
Service provider investment in carrier Ethernet is growing faster than overall telecom capital expenditures, so it is one of the areas that defied the economic downturn.
Also it is important to note that the economic recession has not dampened US enterprises appetite for Ethernet service.
US enterprises and consumers are expected to spend more than $37 billion over the next five years on Ethernet services provided by carriers, according to a new market research study from The Insight Research Corporation.
Insight is projecting that the surge in demand will peak by 2011 as the economy improves Ethernet revenue growth rate will hit 29% on a compounded annual basis.
The market is driven chiefly by the move to IP next-generation network transformation projects and growing traffic (particularly video traffic) from consumer, business, and mobile back haul networks. Routers, carrier Ethernet switches and optical gear constitute the largest segments of the carrier Ethernet equipment market, while Ethernet microwave is the market's fastest growing segment, based on mobile back haul use. Cisco remains the worldwide revenue market share leader in the carrier Ethernet switch, Ethernet IP core router, and Ethernet IP edge router markets.
Mobile back haul equipment spending increased by 21% in 2009, to $7.2bn worldwide, according to Infonetics. Wire line service providers are heavily investing in Carrier Ethernet for a variety of applications, including inter-connecting their own points of presence (POPs) and aggregating traffic from DSLAMs. Mobile back-haul is expected to be the second most popular application driving investment by service providers in Carrier Ethernet.
Ethernet services market is growing in exponentially year on year, and this has been supported by the financial reports of many profiled service providers, often citing annual revenue growth figures of around 15%. Also, the availability of Ethernet services has moved from local point-to-point services to national and global VPN products which are often offered as a complement to established IP VPN services.
There are a number of technical issues due to which it is broadly accepted that Ethernet VPN services cannot scale beyond 50 interconnected sites, which means that the future is likely to be dominated by hybrids of IP VPNs and Ethernet services.