Providers pursue network virtualisation to deliver next-gen services and expand growth opportunities, finds Frost & Sullivan’s Digital Transformation team
SANTA CLARA, Calif. – Sept. 6, 2017 – The retail and wholesale Ethernet services market in Europe is experiencing steady growth, driven by enterprises’ use of high-bandwidth applications, such as cloud-based and data-heavy workloads. Private connectivity services like Ethernet, particularly long-haul Ethernet private line (EPL) or Ethernet over optical-fibre services, can provide the high-performance connections required for agile, on-demand, real-time cloud applications. Leading network service providers (NSPs) are equipping themselves to meet this new demand by investing in software-defined networking (SDN) as well as network functions virtualization (NFV) to improve customer service experience and eBonding.
Frost & Sullivan’s analysis, European Retail and Wholesale Carrier Ethernet Services Market, Forecast to 2021, projects the market will reach revenues of $5,783.5 million by 2021, while retail services will be worth $6,304.8 million. The study highlights growth drivers and restraints, examines strategic approaches of different providers, and delves into competitive parameters.
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“In a highly competitive market, service providers are differentiating their Ethernet services by offering additional features enabled by SDN and NFV. This is vital as commoditisation slows down revenue growth. SDN and NFV will simplify network provisioning, facilitate transparency, enable real-time functionality, and reduce costs by making networks software-centric,” said Frost & Sullivan Digital Transformation Research Director Adrian Drozd. “On-demand Ethernet services, on-demand bandwidth, and deployment/control through online portals, are some of the features that will be integrated into existing portfolios.”
Key trends for the overall market include:
- Dominance of metro Ethernet among market segments;
- Accelerated demand for higher port speeds of 10 to 100 gigabits per second (Gbps);
- Focus on United Kingdom, Germany, France, and Benelux by major players, Colt, British Telecom, and Orange;
- Partnerships between fixed network providers and wholesale providers to allow the former to build network presence and provide end-to-end Ethernet solutions for enterprise customers, including last-mile connectivity for their VPLS and multiprotocol label switching (MPLS)/IP virtual private network (IP VPN) deployments;
- Demand from cloud, data centre, and content providers, especially for high-bandwidth, wholesale E-Line services; and
- Emergence of managed software-defined wide area network (SD-WAN) as a new revenue stream.
“The key benefit of SD-WAN is the increasing importance of secure application delivery with improved routing capabilities, thus decreasing focus on the type and ownership of the underlying transport network,” noted Drozd. “As a result, the market is likely to become increasingly network-agnostic. This may, in turn, change the way revenue is reported amongst providers, resulting in lower focus on different segmentations such as Ethernet over dedicated or switched technologies.”
European Retail and Wholesale Carrier Ethernet Services Market, Forecast to 2021, is part of new Frost & Sullivan’s Communication Services Growth Partnership Service program.
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European Retail and Wholesale Carrier Ethernet Services Market, Forecast to 2021
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