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December 10, 2014

Why Ethernet revenues in Europe are booming

The market for wholesale Ethernet services is set to reach $5.16bn in 2018.

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Ethernet services could unlock more than $5bn in revenues for vendors in Europe within the next four years, driven by an uptake in cloud services across the region.

The latest report from Frost & Sullivan, a market research firm, predicts the market for wholesale Ethernet services to reach $5.16bn in 2018 from $2.73bn last year, as revenues for retail carrier Ethernet hit $5.64bn.

The research puts the growth down to the rise in the number of companies adopting data centre and cloud services across Europe.

Shuba Ramkumar , a research analyst at Frost & Sullivan, said: "Ethernet service deployments are on the rise as reliability and flexibility benefits make the technology ideal to power private cloud networks."

"In their continuing effort to enlarge network presence and reach more customer sites, traditional wireline carriers will remain a key wholesale customer group for Ethernet service vendors."

However, the research said price erosion and the economic downturn in Southern Europe would decrease overall revenues.

"With fierce competition making customer acquisition and retention difficult, it is important for providers to improve their economies of scale in order to increase profits and push ahead of competitors," Ramkumar said.

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"Focussing on switched Ethernet services, acquiring regional competition, and offering converged services will help vendors consolidate their position."

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