Carrier Ethernet spending tops $5.5B in 2013 says Insight Research

Sept. 9, 2013

U.S. enterprises are expected to spend more than $49 billion over the next five years on Ethernet services provided by carriers, according to a new study from The Insight Research Corp.

U.S. enterprises are expected to spend more than $49 billion over the next five years on Ethernet services provided by carriers, according to a new study from The Insight Research Corp.

Ethernet metro area and wide area services are ubiquitous, available from all major data service providers, including cable MSOs, who are building a formidable base around Ethernet services in the small to mid-sized business market, says Insight Research. This conclusion echoes one reached by Heavy Reading (see “Cable MSOs move in on Ethernet services, Heavy Reading finds”).

According to Insight Research's study, "US Carriers and Ethernet Services, 2013-2018," Ethernet's popularity is driven by its ability to meet growing bandwidth demands at lower cost and with greater flexibility than legacy TDM-based services. The large-scale migration of cell site mobile backhaul from TDM to Ethernet will continue to be a major driver over the next five years, as carriers complete their 4G LTE deployments.

As a result, the industry revenue is expected to grow from nearly $5.5 billion in 2013 to over $13 billion by 2018, according to the market research firm.

"Ethernet services in the small to mid-sized business market is the fastest growing segment of this market, while wireless backhaul still commands the top segment," said Fran Caulfield, director of research at Insight. "Over the five year forecast period we project a compounded annual revenue growth rate of 19 percent, with the highest growth levels in the next two years.”

The study examines Ethernet market spending and usage patterns by topology (E-line, E-LAN, and access), regional domain (metro, wide area, and access), retail/wholesale, and various bandwidth levels. In addition, the report covers the impact industry standards, such as the Metro Ethernet Forum’s Carrier Ethernet 2.0, have on the market, as wells as carriers’ increased reliance on interoperability with other service providers.

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