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Home > Communications > Access Technology > LAN/WAN Technology
Carrier Ethernet Services Market in Europe
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Research Overview
This Frost & Sullivan research service titled Carrier Ethernet Services Market in Europe provides a thorough analysis of the key drivers, restraints and challenges in the market. It also offers a description of the market size, along with an overview of operators’ profiles. In this research, Frost & Sullivan's expert analysts thoroughly examine the following markets: Ethernet services in the metropolitan and long haul spaces.
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Carrier Ethernet services
Market Overview
Greater Bandwidth Capability and Emerging Applications to Spur Demand for Carrier Ethernet Services
Developed as a technology for the enterprise environment, Ethernet is rapidly gaining significance due to its simplicity and high bandwidth capabilities. The evolution of high-speed Ethernet has allowed the expansion of this technology into the metropolitan area network (MAN) and the wide area network (WAN) environment. In the future, carrier Ethernet services are expected to increase their presence in Europe, facilitated by network migration implemented by operators, the inherent benefits of Ethernet technology, enterprise demand and new application requirements. With the need to achieve cost efficiencies and increase service offerings, operators are migrating their networks to next-generation infrastructure based on Internet protocol (IP) and Ethernet. Consequently, legacy services are likely to be phased out and Ethernet is expected to replace layer 2 services.
"Bandwidth-intensive applications, the introduction of new services and the need to reduce cost are creating greater need to shift from traditional, bandwidth-limited telecom services to technologies such as Ethernet," states the analyst of this research service. "End users are in need of services that are more flexible and scalable, hence generating savings by contracting what they actually need." In the metropolitan space, carrier Ethernet services are becoming more popular as the technology evolves and becomes standardised. The deployment of services such as triple play (voice, video and data) is creating demand for Ethernet services in the metropolitan space for aggregation of data and transport in the backbone. Moreover, with the launch of third generation (3G) mobile services, mobile data usage is expected to increase, along with wireless backhaul traffic, currently transported over bandwidth limited 2 Mbps connections. Underpinned by these factors, revenues in the carrier Ethernet services market, pegged at $1.10 billion in 2005, are projected to reach nearly $5.00 billion by 2012.
Product Differentiation Crucial for Market Success
Despite the benefits of carrier Ethernet, the service footprint remains limited, and is likely to affect customer awareness. The deployment of carrier Ethernet services in the long haul is restrained, with few of the pan-European operators providing consistent offerings across Europe, while the national operators have been introducing long haul services only in the recent past. "There are standardisation issues that need to be overcome," remarks the analyst. "The lack of interoperability testing until the end of 2005 obstructed the possibility of extending virtual private LAN services on an end-to-end basis when several carriers were involved. As a result, many operators have resorted to proprietary certification processes." Furthermore, service providers are cautious in their deployment of Ethernet services due to the perception that such services may cannibalise revenues from legacy services.
As carrier Ethernet services are perceived as less expensive than legacy services, service operators would do well to differentiate their offerings based on factors other than pricing. Creating value-added services will become crucial to prevent carrier Ethernet services from becoming a telecommunications ‘commodity’.
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