Carrier Ethernet Matures, Market To Grow Through 2015

Carrier Ethernet’s considerable advancement as a carrier-grade technology, apart from its cost attractiveness, has been an important factor that has enabled carrier Ethernet switch/ router network equipment providers (NEP) to respond to key market trends.

Vendor effort to offer pre-standards version and eventually adopt the standards quickly have been pivotal to the continued improvement in carrier Ethernet technology.

New analysis from Frost & Sullivan (carriernetworks.frost.com), World Carrier Ethernet Switch and Router Market, finds that the market earned revenues of $5.3 billion in 2008 and estimates this to reach $17.0 billion in 2015.

The continuing maturity of carrier Ethernet technology has made it applicable in rapidly emerging applications such as mobile backhaul.

“Vendors have progressed rapidly in providing synchronisation solutions based on International Telecommunication Union-Telecommunication (ITU-T) and Institute of Electrical & Electronics Engineers (IEEE) standards and proprietary solutions,” says Frost & Sullivan Research Analyst Prayerna Raina. “In addition to synchronisation for mobile backhaul, the work on end-to-end management solutions, carrier Ethernet for transport, and higher Ethernet speeds will enable vendors to address service provider requirements.”

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Comprehensive solutions are essential if vendors are to increase market share in this highly concentrated market. The top three vendors in the market account for about seventy percent of the market share. Presence of strong regional vendors in Asia, the largest market for carrier Ethernet, further intensifies the competition. Incumbent relationships and regional competition are challenges that still pose barrier to market expansion on a global level.

“Carrier Ethernet is a global opportunity, but expanding globally is a challenge that vendors, especially mid-tier vendors, will need to address aggressively,” cautions Raina.

Even though carrier Ethernet is a concentrated market, it offers immense growth opportunities due to migration of networks to next-generation technologies, convergence of infrastructure to carry residential, business, and mobile traffic, and the deployment of Tier 2 and 3 new builds for carrier Ethernet services. Vendors must capitalise on the opportunities in rapidly growing regions, product segments, and applications, by tailoring their product positioning and marketing efforts for each application and region.

“Carrier Ethernet solutions that provide future-proof, highly scalable solutions, support for multiple applications and network convergence at competitive price points will be best positioned to capture market share,” notes Raina.