US enterprises are expected to spend more than $49 billion over the next five years on Ethernet services provided by carriers, according to a new market research study from Insight Research. Industry revenue is expected to grow from nearly $5.5 billion in 2013 to more than $13 billion by 2018.
Over the five year forecast period, Insight projects a compounded annual revenue growth rate of 19 percent, with the highest growth levels in the next two years.
Ethernet metro area and wide area services are ubiquitous, available from all major data service providers, including cable/MSOs, who are building a formidable base around Ethernet services in the small to mid-sized business market, the firm said.
According to Insight Research’s market analysis, Ethernet’s popularity is driven by its ability to meet growing bandwidth demands at lower cost and with greater flexibility than legacy TDM-based services. The large-scale migration of wireless backhaul cell sites from TDM to Ethernet continues to be a major factor in the next five years, as carriers complete their 4G LTE deployments.
“Ethernet services in the small to mid-sized business market is the fastest growing segment of this market, while wireless backhaul still commands the top segment,” said Fran Caulfield, director of research at Insight.