The U.S. retail carrier Ethernet services market has currently entered the growth phase of the product lifecycle, recording an impressive growth rate of 37 percent, according to researchers at Frost & Sullivan.
Market revenues for 2009 exceeded $1.5 billion. Ethernet as a transport service is gaining traction for a number of reasons, including scalability and value, both for long-haul and access applications, Frost & Sullivan says.
But Ethernet still is not widely available in the U.S. markets and service providers are struggling with significant price compression in the long-haul markets. Customers still have some concerns about service level agreeements for Ethernet virtual private line (EVPL) services.
As the market migrates from traditional private lines to Ethernet, customers expect the same kind of service performance as available on T1/T3 and SONET circuits. For this reason, Ethernet private line, which is enabled over SONET, is more popular than EVPL.
Service providers are increasingly focusing on offering SONET type of protection on switched Ethernet services. However, the concerns are largely attributed to the customers comfort level with moving to a shared platform as compared to dedicated circuits.
Going forward, 10 Mbps and 100 Mbps ports will constitute a major portion of the long-haul E-LAN ports sold.
Customers are opting for higher port speeds for head office to data center connectivity and lower speeds to connect the branch offices.
“Combining layer-two Ethernet-based VPN with layer-three MPLS VPN is a key trend in the market,” Frost & Sullivan says.