European wholesale Ethernet services market is estimated to reach $5.16 billion in 2018, while retail market revenues are projected to hit $5.63 billion, according to Frost & Sullivan's report - 'European Wholesale Carrier Ethernet Services and European Retail Carrier Ethernet Services'. The leading management consulting and market research firm said that the increasing demand for enterprise connectivity is driven by a number of factors, including the boom in data centers and in data traffic. The European carrier Ethernet services market is also expected to rise further as the adoption of cloud services escalates in the region. The United Kingdom, Germany and France constitute the three largest markets while the less mature Eastern European economies are expected to exhibit the fastest growth rates for the services, said Frost.
Despite the high potential the Ethernet services market promises, Frost however cautioned that ethernet services vendors could face several challenges such as price erosion, slower uptake post the economic downturn, especially in Southern Europe. This will be compounded by the competition from layer 3 MPLS-VPN or multiprotocol label switching-virtual private network.
Shuba Ramkumar, Research Analyst, Information & Communication Technologies, Frost & Sullivan
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.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. Focussing on switched Ethernet services, acquiring regional competition, and offering converged services will help vendors consolidate their position.
