Report: Ethernet Revenues Forecast to Drop But Opportunities Remain

Share:

Ethernet services are needed to help meet the demand for increased bandwidth and cloud connectivity, but overall revenues will nevertheless decline, according to a new Ethernet revenues forecast from Frost & Sullivan.

Ethernet prices are dropping due to market maturity, downward pricing pressure and lack of sustained demand for point-to-point Ethernet services with SD-WAN (software-defined wide area network), the report says. As a result, the Ethernet market will decline from $6.35 billion in 2021 to $5.94 billion by 2024.

“Although the market is declining, there is still demand from enterprises that consume Ethernet services for their flexibility, scalability, and reliability,” said Gina Sanchez, Frost & Sullivan industry principal, in a prepared statement. “There will be a sustained call for switched services (Ethernet virtual private line services, in particular) since companies benefit from purchasing a single user network interface (UNI) port and creating multiple Ethernet virtual [circuits] to share the bandwidth among different applications.”

Despite the Ethernet market challenges, there are some growth opportunities, according to Frost & Sullivan, which recommended that Ethernet providers concentrate on the following opportunities:

  • Cloud: NSPs must provide flexible and scalable Ethernet services while also expanding the network.
  • Customer Experience: Network service providers should focus on the customer’s digital experience to differentiate their offerings (e.g., portals, systems and processes).
  • Leverage Dynamic Services: Frost & Sullivan recommended that Ethernet service providers give customers greater control over their network and bandwidth efficiency.