Carrier Ethernet Suffers Shrinkage
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