U.S. carrier Ethernet revenues hit $6 billion in 2011

Posted by GenD on Wednesday, January 25, 2012 with No comments
U.S. carrier Ethernet services sold by cable, incumbent and competitive service providers topped $6 billion in 2011, according to Vertical Systems Group. Those figures suggest why the business is more attractive to specialty providers than to the tier one providers in the U.S. market.

In a U.S. market with annual service revenues topping $300 billion annually, a $6 billion market, even if directly related to the rest of the core capacity business, isn’t a big enough revenue generator for a firm the size of AT&T or Verizon to spend too much time thinking about.
Big carriers need big markets to make any impact on their revenue top lines, or bottom lines. That tends to leave the niche opportunities to smaller providers whose cost structures are better aligned to $100 million opportunities than $5 billion opportunities.
It is, on the other hand, a very attractive business for smaller competitors to whom $100 million in annual revenue is highly significant.
Also, as is typical of capacity products, revenue growth was accompanied by a compression of average selling prices, a pattern that is typical of the capacity business overall. Carrier Ethernet grows
Capacity markets these days feature a continual decline in cost per bit prices.