Carrier Ethernet global expansion is still challenging, says new study

NOVEMBER 20, 2009 -- Product differentiation is key to survival in the competitive Carrier Ethernet switch and router market, finds Frost & Sullivan.

NOVEMBER 20, 2009 -- New analysis from Frost & Sullivan, "World Carrier Ethernet Switch and Router Market," finds that the market earned revenues of US$5.3 billion in 2008 and estimates this to reach $17.0 billion in 2015.

The continuing maturity of Carrier Ethernet technology has made it applicable in rapidly emerging applications such as mobile backhaul.

"Vendors have progressed rapidly in providing synchronization solutions based on International Telecommunication Union-Telecommunication (ITU-T) and Institute of Electrical & Electronics Engineers (IEEE) standards and proprietary solutions," says Frost & Sullivan research analyst Prayerna Raina. "In addition to synchronization for mobile backhaul, the work on end-to-end management solutions, Carrier Ethernet for transport, and higher Ethernet speeds will enable vendors to address service provider requirements."

Comprehensive technologies are essential if vendors are to increase market share in this highly concentrated market, says the analyst firm. The top three vendors in the market account for about 70% of the market share. The presence of strong regional vendors in Asia, the largest market for Carrier Ethernet, further intensifies the competition. Incumbent relationships and regional competition are challenges that still pose a barrier to market expansion on a global level.

"Carrier Ethernet is a global opportunity, but expanding globally is a challenge that vendors, especially mid-tier vendors, will need to address aggressively," cautions Raina.

According to Frist 7 Sullivan, even though Carrier Ethernet is a concentrated market, it offers immense growth opportunities due to migration of networks to next-generation technologies; convergence of infrastructure to carry residential, business, and mobile traffic; and the deployment of Tier 2 and 3 new builds for Carrier Ethernet services. Vendors will need to capitalize on the opportunities in rapidly growing regions, product segments, and applications by tailoring their product positioning and marketing efforts for each application and region.

"Carrier Ethernet solutions that provide futureproof, highly scalable solutions, support for multiple applications and network convergence at competitive price points will be best positioned to capture market share," notes Raina.

"World Carrier Ethernet Switch and Router Market" is part of the Communications Infrastructure & Convergence Growth Partnership Services program, which also includes research in the following markets: world carrier switch and router markets, world mobile backhaul infrastructure markets, world Carrier Ethernet switch/router markets.

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