Worldwide metro Ethernet equipment revenue hit $2.9 billion in 2003, and is projected to grow more than 150 percent to $7.5 billion by 2007, a CAGR of 27 percent, according to Infonetics Research's market size and forecast service, Metro Ethernet Equipment. Meanwhile, Ethernet equipment ports worldwide hit 1.1 million in 2003, up from 906,000 in 2002, and are expected grow more than 400 percent to 5.8 million by 2007, a CAGR of 52 percent.
"One of the most interesting trends in this market is what's happening with RPR, which is growing at a phenomenal rate," says Michael Howard, principal analyst of Infonetics Research and lead analyst of the report. "Worldwide RPR revenue hit $323 million in 2003, and we project it to grow 200 percent to $967 million by 2007, a CAGR of 32 percent. We discovered in our Service Provider Plans for Metro Optical and Ethernet, North America and Europe 2004 study (also released this week) that service providers are figuring in RPR over SONET/SDH plans much more now than they were even six months ago. In fact, 63 percent now say they plan to offer Ethernet services over RPR in the next few years."
More than $24 billion will be spent worldwide on Ethernet in metro networks between 2003 and 2007, according to the firm. Every year over the next 10 years, Ethernet will account for a larger portion of metro capital expenditures, driving double-digit growth through 2007. Ethernet will take over the metro, the company says, but the strong installed base of SONET/SDH will make the transition a slow one.
New technologies that enable service providers to add Ethernet to their existing networks, such as VCAT/GFP over SONET/SDH, RPR, MPLS, and VDSL, are easing the transition and paving the way for Ethernet to become a respected telecom grade option for metro networks, according to Infonetics.
