NEW YORK, Jan. 27, 2016 /PRNewswire/ -- Business Carrier Ethernet Services Market Update, 2015
Carrier Ethernet continues to gain acceptance among enterprises, due to the benefits it offers: scalability, reliability, and cost efficient bandwidth. U.S. market revenues exceeded $ billion in 2014, and are forecast to reach $ billion in 2020. Market migration from time division multiplexing (TDM) private lines (T1/T3/SONET) to Ethernet is fueling double digit revenue growth for both dedicated and switched Ethernet services. However, the year-over-year (YoY) growth rates are slowing down (compared to 3 years ago) due to market maturity, and the fact that Ethernet services are not as ubiquitously available as T1/T3 circuits. 2014 witnessed an increased urgency from communication service providers (CSPs) to expand their Ethernet footprint through network-to-network interconnects (E-NNI) and a renewed focus on Ethernet over Copper services.
As carriers expand their network footprints to reach more customer locations, Frost & Sullivan expects the growth rates to increase. In terms of service configurations, Ethernet Private Line (EPL) and Ethernet Virtual Private Line (EVPL) are seeing increased growth as replacements to TDM circuits. Similarly, E-LAN services continue to see growth in key verticals, such as healthcare, government, and education, which often need multipoint-to-multipoint connectivity. Switched Ethernet, with its ability to support multiple Ethernet Virtual Circuits (EVCs) that enable service multiplexing onto a single port, has seen significant adoption in the metro markets. E-LAN services are a cost-effective and reliable alternative for customers migrating from expensive ATM and Frame Relay networks. However, demand for Virtual Private LAN Services (VPLS) continues to be modest, as most enterprises continue to prefer Layer 3 MPLS VPNs over VPLS for multi-site connectivity.
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