Ethernet equipment

Carrier Ethernet Suffers Shrinkage

LONDON -- Ethernet Expo: Europe 2009 -- The global market for carrier Ethernet switch/router (CESR) equipment is set to shrink in value in 2009, despite continued growth in the Ethernet services market, according to a new market projection from Heavy Reading.

Heavy Reading senior analyst Stan Hubbard told attendees here that there are now between 400 and 500 operators delivering Ethernet services globally, generating double-digit growth in Ethernet services revenues and even higher growth in the number of circuits provisioned. But the global downturn's impact on capital expenditure budgets, even greater competition among equipment vendors, and the impact of currency conversion rates means the CESR market will shrink in value this year to just over $1.9 billion, compared with more than $2.1 billion in 2008.

Hubbard, though, believes the blip will be short-lived. "We still see good long-term growth potential, with the market set to bottom out in mid-2009 after a disappointing first quarter. I expect to see it growing again by the fourth quarter of this year," stated the analyst.

That growth will continue through the next few years, taking the value of the CESR market to nearly $2.6 billion in 2012, when Asia/Pacific will account for about 34 percent of the market, EMEA (Europe, Middle East, and Africa) 32 percent, and North America 29 percent.

Hubbard expects the deployment of carrier Ethernet equipment supporting wireless backhaul to grow significantly. In 2008, wireless backhaul projects generated CESR sales worth around $103 million, but the analyst expects that to grow to more than $220 million in 2012.

Market projections from Hubbard's Heavy Reading colleague, Patrick Donegan, support that outlook. In his most recent "Ethernet Backhaul Quarterly Market Tracker" report (March 2009), Donegan predicted that 25 percent of the world's cell sites will be served by an Ethernet service by the end of 2012, compared with just 2 percent at the end of 2008. (See ADVA, Ethos Enter Ethernet Backhaul.)

— Ray Le Maistre, International News Editor, Light Reading

michaelinfonetics 12/5/2012 | 4:04:35 PM
re: Carrier Ethernet Suffers Shrinkage

Hi Ray...The story title is misleading and could be harmful to the CE Carrier Ethernet market. What is down according to Stan is CESR (carrier Ethernet switch routers), not all of Carrier Ethernet. In our tracking, CE includes Ethernet over SDH/SONETT, Ethernet over WDM, EPON, EADs (EFM bonded copper, Ethernet over copper like E1/T1, Ethernet directly over fiber), Ethernet on edge and core routers, VDSL/SHDSL, Ethernet microwave. As a whole, this market is expanding not holding or dropping.

Thanks, Michael

digits 12/5/2012 | 4:04:34 PM
re: Carrier Ethernet Suffers Shrinkage

Headlines live in a different world, Michael. And the short summary accompanying the headline identifies CESR.

And 'harmful'? I'm sure the carrier Ethernet sector can handle it...  :-) 

michaelinfonetics 12/5/2012 | 4:04:33 PM
re: Carrier Ethernet Suffers Shrinkage

Hi Ray...

 Ah, that's right, the editorial seductive-headline-creators don't write the stories, they just promote them. It worked on me for sure.

You're right that the CE market won't slow due to the headline--perhaps a bit over reactive on my part.


digits 12/5/2012 | 4:04:33 PM
re: Carrier Ethernet Suffers Shrinkage

And there's only so much one can squeeze into a headline...

Stan's outlook shows only a temporary blip, and suggests overall that the carrier Ethernet sector has a healthy future.

I would have to agree with that outlook. Last week's Expo in London showed how operators are basing more service strategy on Ethernet capabilities, though, of course, there's a great deal of work still to do on delivering a broader range of capabilities too.

Compared with other telecom equipment sectors, I reckon the carrier Ethernet market -- whether switch/routers, access, OSS, and associated packet/optical transport -- is a good place to be, especially as  LTE becomes the de facto network blueprint in the mobile world.


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