Bright outlook for Carrier Ethernet

Despite the global downturn, Carrier Ethernet is forecast to expand rapidly over the next five years and outpace overall telecom capex growth

The carrier Ethernet equipment market is expected to top $32 billion in 2013, according to the first edition of Infonetics Research's biannual Carrier Ethernet equipment report released in April.

The report claims the Carrier Ethernet's growth is being 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-generation 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/synchronous digital hierarchy.

Infonetics said service providers spent $17 billion on Carrier Ethernet equipment in 2008. The operators will increase their spending every year at a healthy clip over the next five years, the report added.

Further, the company noted that the largest investments will be in IP core and edge routers, carrier Ethernet switches and optical gear.

At the same time, 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 wide area network services.

Providers also use Ethernet to reduce capex and opex by installing a single 100M or GE link to initially sell lower speeds. They later on upsell to higher speeds 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 Ethernet access devices (EADs), specialized EADs designed with demarcation and operations and management functions to deliver Ethernet line and E-LAN services.

Worldwide sales of EADs are forecast to increase at a CAGR higher than Carrier Ethernet equipment in general, and much higher than the slow growth general telecom capex.

Michael Howard is principal analyst at Infonetics Research, focusing on optical, routing, switching and Ethernet

 

Suggested Articles

Wireless operators can provide 5G services with spectrum bands both above and below 6 GHz—but that doesn't mean that all countries will let them.

Here are the stories we’re tracking today.

The 5G Mobile Network Architecture research project will implement two 5G use cases in real-world test beds.