Carrier Ethernet market receives boost

Increasing demand for enterprise connectivity and the boom in data traffic are sustaining growth in the European wholesale and retail carrier Ethernet services market. Uptake will rise further as the adoption of cloud services escalates in the region. While the United Kingdom, Germany and France constitute the three largest markets, the less mature Eastern European economies will exhibit the fastest growth rates for Ethernet services.

Friday, 12th December 2014 Posted 9 years ago in by Phil Alsop

New analysis from Frost & Sullivan, European Wholesale Carrier Ethernet Services and European Retail Carrier Ethernet Services, find that the wholesale Ethernet services market earned $2.73 billion in 2013 and estimate this to reach $5.16 billion in 2018. Meanwhile, retail market revenues stood at $3.10 billion in 2013 and are projected to hit $5.63 billion in 2018. Although both the metro and long-haul segments will contribute to market revenues, the need for inter-city enterprise connectivity will spur faster growth in long-haul services.

“Ethernet service deployments are on the rise as reliability and flexibility benefits make the technology ideal to power private cloud networks,” confirmed Frost & Sullivan Information & Communication Technologies Research Analyst Shuba Ramkumar. “In their continuing effort to enlarge network presence and reach more customer sites, traditional wireline carriers will remain a key wholesale customer group for Ethernet service vendors.”

While the market offers immense potential, Ethernet services vendors also face several challenges:
• Price erosion, which is affecting revenues
• Slower uptake post the economic downturn, especially in Southern Europe
• Layer 3 MPLS-VPN or multiprotocol label switching-virtual private network edging out retail Ethernet in terms of enterprise interest

“With fierce competition making customer acquisition and retention difficult, it is important for providers to improve their economies of scale in order to increase profits and push ahead of competitors,” observed Ramkumar. “Focussing on switched Ethernet services, acquiring regional competition, and offering converged services will help vendors consolidate their position.”

Developing extensive network presence, automating network services, and offering performance monitoring tools will also be key strategies for success in the European wholesale and retail Ethernet services market.