Metro Ethernet to grow 131% by 2006
Worldwide metro Ethernet equipment revenues were USD2.5bn in 2002 and are projected to grow 131%, or a compound annual growth rate (CAGR) of 23%, to USD5.7bn by 2006, according to Infonetics Research's Metro Ethernet Equipment market size and forecast service. Metro Ethernet equipment ports totalled 756,000 in 2002 and will grow 337% to 3.3m by 2006.
"In the next 10 years, Ethernet will inexorably take over the metro," said Michael Howard, principal analyst and co-founder. "There will never be a wholesale change because of the SONET/SDH installed base, but every year Ethernet will account for a larger portion of metro CapEx. Between 2002 and 2006, Ethernet will make major in-roads into metro telecom equipment spending, accumulating USD18.9bn."
This spending is driven by the fact that more customers are demanding Ethernet services, lower prices, and the convenience of incremental bandwidth from their service providers. Even with CapEx pressures, service providers must respond to customers or lose them to a competitor, so they're investing in metro Ethernet equipment.