Service revenues on fire

Worldwide Ethernet service revenue exceeded US$2.5billion in 2004, and is projected to grow 276% between 2005 and 2009, according to Infonetics Research’s, Ethernet Services market size and forecast.

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By  Simon Duddy Published  May 23, 2005

Worldwide Ethernet service revenue exceeded US$2.5billion in 2004, and is projected to grow 276% between 2005 and 2009, according to Infonetics Research’s, Ethernet Services market size and forecast. Infonetics also expects service revenue to more than double in 2005. Wholesale Ethernet service revenue, much of which comes from point-to-point Gigabit Ethernet links, accounts for about 25% of all Ethernet service revenue, while revenue from retail Ethernet services (Internet, Ethernet private line, and transparent LAN services) accounts for about 75% of all Ethernet service revenue. Geographically, Asia Pacific accounts for over 40% of total Ethernet service revenue, while EMEA accounts for over 30%, and North America over 20%. “The Ethernet services market is on fire for several reasons,” says Michael Howard, Infonetics Research principal analyst and author of the report. “On the end user side, many companies are hungry for more bandwidth and many are looking to reduce their WAN costs. Ethernet offers the only way to achieve both due to its superior bandwidth capacities and cheaper prices per bit. Service providers are also looking for ways to connect their various sites with higher bandwidths at cheaper price per bit, and Gigabit Ethernet point-to-point wholesale services meet this demand,” he explains. On the equipment side, Infonetics says recent carrier-class improvements have been made to Ethernet products that are enabling service providers to offer new Ethernet services, including those with QoS and SLAs, characteristics of the long-standing private line, frame relay, and ATM services they are now beginning to replace.

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