Ethernet, IP MPLS VPN services to top $78bn in 5yrs

CALIFORNIA, USA: Service providers around the globe increased their Ethernet services revenue by 20 per cent in 2010 over 2009, and IP MPLS VPN services revenue by 12 per cent, as companies continue to seek the efficiencies and cost savings these services afford, finds market research firm Infonetics Research in a new survey.

The combined, global revenue from Ethernet services and IP MPLS VPN services would top $78 billion by 2015.

Also Read: Tata Comm gears-up to roll-out NGE in India

Michael Howard, co-founder and principal analyst of Infonetics Research, said: "While retail business makes up the bulk of the Ethernet services market, revenue from wholesale Ethernet services (i.e., services sold by service providers to service providers) is growing faster than retail, at a 19 per cent compound annual growth rate through 2015.

Asia Pacific made up the biggest share of Ethernet services revenue, at more than 1/3 of the global total, and would continue as the leading region at least through 2015, led by China, India, and Southeast Asia (Vietnam, Philippines, Laos, Cambodia, Thailand).

"Wholesale Ethernet is being purchased by carriers looking to bring down the skyrocketing cost of mobile backhaul, to increase the capacity of urban wireline connections getting crushed by data and video traffic, and to outfit planned LTE sites," he added.

The fastest-growing segment of wholesale Ethernet services was the over-1Gbps to 10Gbps speeds category, projected by Infonetics to grow at a 37 per cent compound annual growth rate from 2010 to 2015, spurred by Ethernet for mobile backhaul transport.

Market momentum in future years would be fueled by the growing use of cloud services, which will be delivered by many service providers over IP MPLS VPNs and Ethernet services.