Ethernet Services Growing In Face of Downturn

Worldwide service provider revenue for Ethernet services grew 36 percent sequentially in 2008, to $16.9 billion, and is forecast to nearly double to $33 billion by 2013, according to a new report from Infonetics Research.

In spite of the downturn, and in part because of it, uptake of Ethernet services is growing at a healthy pace as companies seek to increase efficiencies and decrease costs, said Michael Howard, co-founder and principal analyst of Infonetics Research. “In today’s über-competitive, fast-changing, network-oriented world, organizations are looking to control WAN costs despite rising bandwidth needs by turning to Ethernet, a known cost-per-bit champion, he said.

Although pricing varies widely, Ethernet services are typically at least 20 percent to 30 percent lower than frame relay or private line services. In North America, the monthly cost for 100mbps Ethernet is about $50 per megabyte, but that monthly cost increases to about $180 per megabyte when using DS3s or SONET.

The largest Ethernet service revenue opportunities by segment include 100mbps retail E-LINE and E-LAN services, and 1gbps wholesale services. The fastest growing Ethernet service revenue opportunities are all in the 10gbps speed segments, Infonetics noted.

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