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Sunday, August 21, 2011

$11.5 billion carrier Ethernet services revenue in 2015

North American Carrier Ethernet services will grow grow from $4.3 billion in 2011 to at least $11.5 billion ($10.5 billion in the United States alone) by 2015, for about a 29 percent compound annual growth rate.

Transport and access revenue will increase less (at 28.8 percent CAGR), while management revenue associated with managed Ethernet products will grow far more (at a 30.6 percent CAGR over the same period). North American management revenue, which comprises just 5 percent of total Ethernet revenue today, will increase to 5.5 percent through 2015.
Ethernet service revenue from small and mid-sized businesses (companies with up to 499 employees) in North America has grown from a relatively miniscule amount in the early 1990s to over $516 million in early 2011.
The Yankee Group expects SMB Ethernet services revenue to reach $3.47 billion by 2015, a 46.4 percent compount average growth rate.
Within North America, small businesses (those with up to 99 employees) accounted for about 25 percent of total SMB Ethernet revenue (or U.S.$130 million) in 2010. Yankee Group researchers forecast that increasing to over 31 percent ($1.08 billion) in 2015, for an approximate 53 percent CAGR.
Despite strong growth in the very small business segment (those with 1-49 employees), the bulk of actual revenue generated from small businesses will remain in the 50- to 99-employee small business segment by better than a 4-to-1 ratio through 2015.
Revenue from mid-size businesses (with 100 to 499 employees) will also grow from about U.S.$387 million to U.S.$2.39 billion (a 44 percent CAGR) during this same period.
Large businesses (those with more than 500 employees) comprise the bulk of Ethernet services market revenue and will exhibit strong growth, rising from $2.73 billion in 2010 to slightly over $8 billion in 2015, for a 24.2 percent CAGR.
Businesses (with 500 to 999 employees) will show the stronger growth at over 40 percent CAGR for the period, compared to only about 17 percent CAGR for the large enterprise space (firms with more than 1,000 employees).
Businesses with 500 to 999 employees will represent $3.37 billion of total large business revenue by the end of 2015. This discrepancy is more pronounced in Canada, where businesses are more concentrated in smaller business-size segments.

Sunday, March 20, 2011

What will Sprint do with vacated iDEN spectrum?

It has been clear since the first quarter of 2010 that Sprint had other plans for use of the spectrum that currently supports the iDEN network for Nextel. See http://community.sprint.com/baw/message/175739. Later in 2010 Sprint began to talk about putting some CDMA (3G) services into the vacated iDEN spectrum. See http://www.bgr.com/2010/10/27/dan-hesse-sprint-will-eventually-shutdown-iden-network/.

Sprint has been talking about adding Long Term Evolution support as well, but it is not clear whether it will use some or all of the vacated iDEN spectrum for LTE. The original grant of iDEN frequencies were in the land mobile area, and typically the amount of spectrum is not overly generous, as the original application was not bandwidth intensive. See http://www.ntia.doc.gov/osmhome/allochrt.pdf.
The iDEN network uses the 806 MHz to 824 MHz and 851 MHz to 869 MHz bands, meaning there is 18 MHz in total available for outbound and 18 MHz available for inbound communications. LTE tends to operate in either 10 MHz or 20 MHz channels, and the wider the channel the faster the speed. That means Sprint could, in principle, replace iDEN with LTE in the 800 MHz spectrum once it decommissions the older iDEN network.
Of course, there is business logic for pushing low-bandwidth CDMA traffic into the iDEN bands, especially voice and mesaging, since these apps don’t use much bandwidth. That would free up more bandwidth on the 3G network. On the other hand, there also is logic to creating a new LTE network using all of the 18 MHz spectrum, which would allow building of a very-fast LTE network.
Sprint already is replacing its current infrastructure, supporting three different networks with three sets of radio gear, into a single set of radios that can support all the frequencies Sprint uses, including the 800-MHz iDEN, 1.9 GHz CDMA and 2.5 GHz WiMAX networks. See http://newsroom.sprint.com/press_kits.cfm?presskit_id=19.
On the other hand, there also is the possibility that the 2.5 GHz band, which has spare bandwidth not in commercial use, also could be used to support LTE. That would require a matching decision by Clearwire to adopt LTE in some of the 2.5 GHz band, but is not inconceivable, either.
The advantage of putting low-bandwidth services such as voice into the vacated 800-MHz spectrum is the superior in-building reception.