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Ethernet, IP MPLS VPN services to top $81 bn by 2016

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CIOL Bureau
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CAMPBELL, USA: Despite some slowdown in Europe in 2011 and 2012, we see solid growth ahead for both IP MPLS VPNs and Ethernet services, together topping $81 billion worldwide by 2016, finds Infonetics Research.

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In its latest '2012 Ethernet and IP MPLS VPN Services report' the research firm finds that global Ethernet and MPLS IP VPN service revenue grew a combined 13 per cent in 2011 to just over $50 billion, fueled by surging data traffic, cloud services, and cost-cutting initiatives.

"The move from legacy frame relay, ATM, and leased line services onto Ethernet and IP services is quickening as businesses put a razor-sharp focus on staying competitive in today's highly interconnected, mobile, video- and cloud-oriented world," notes Michael Howard, co-founder and principal analyst of Infonetics Research. "By 2015, ATM and frame relay will virtually vanish, while private leased lines will be around a bit longer."

The growth rate of IP MPLS VPN and Ethernet service revenue soundly outdistances the growth rate of telecom service provider revenue (though actual service provider revenue is increasing).

Asia Pacific is expected to overtake EMEA as the leading region for IP MPLS VPN services in 2012 and already leads in Ethernet services; Asia will remain the leader for the combined IP MPLS VPN and Ethernet services market going forward, led by China and India.

Over ninety per cent of spending on mobile backhaul equipment in 2011 was on IP/Ethernet gear.

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