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Demand for Private Line and SONET Services Sustain Growth for the U.S. Data Transport Services Market Finds Frost & Sullivan - The multi-billion dollar U.S. data transport services market represents huge revenue potential for communication service providers, growing at a compound annual growth rate of 4.6 percent
Demand for Private Line and SONET Services Sustain Growth for the U.S. Data Transport Services Market Finds Frost & Sullivan

 

NewswireToday - /newswire/ - Mountain View, CA, United States, 2010/06/02 - The multi-billion dollar U.S. data transport services market represents huge revenue potential for communication service providers, growing at a compound annual growth rate of 4.6 percent.

   
 
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The launch of Ethernet virtual private line (EVPL) service by most leading carriers is expected to enhance market potential for wholesale E-Line services. Multiprotocol label switching (MPLS) and Ethernet services are expected to ramp up market revenues. The year-on-year (Y-o-Y) growth rates for these services are pegged at 10-12 percent for MPLS and 20-30 percent for Ethernet.

Private line (DS1/DS3) and synchronous optical networking (SONET) services are likely to command a major share of data transport revenues in the near future. Private line services, particularly DS1 and SONET services, have maintained a modest, but steady inflow of revenues, largely owing to stable demand from wireless service providers on the wholesale front, and the reluctance of end users to move to Ethernet unless their bandwidth needs exceed 6 Mbps on the enterprise/business front.

New analysis from Frost & Sullivan (ipcommunications.frost.com), U.S. Data Transport Services Market Overview, finds that the market earned revenues of over $33.0 billion in 2009 and estimates $40.0 billion in 2014.

If you are interested in more information on this study, please send an email to Jake Wengroff, Corporate Communications, at jake.wengroff[.]frost.com, with your full name, company name, title, telephone number, company email address, company website, city, state and country.

"Wavelength services are seeing a growth spike owing to escalating demand for higher bandwidth circuits," says Frost & Sullivan Research Analyst Roopa Shree H. "Also, the emergence of Ethernet has revived the wavelength services market as a number of service providers use waves to provision Ethernet circuits, and most 1 GigE and 10 GigE Ethernet circuits provisioned today are over dense wavelength division multiplexing (DWDM)."

Legacy services, particularly frame relay (FR) and asynchronous transfer mode (ATM), are declining at a faster pace than expected, owing to market migration from these technologies to newer IP-based ones such as MPLS and Ethernet. However, despite the market shift to these newer services, their growth in revenues are not as rapid as the decline in revenues for FR and ATM, because of the price competitiveness of IP-based services that offer more bandwidth for a lower cost.

The U.S. data transport services market (wholesale and retail) is dominated by the Tier 1 carriers. Competition is expected to intensify in the MPLS and Ethernet arena, as carriers begin to position themselves as solution providers (selling voice+Internet+data bundles with MPLS backed by hosted/managed security services, as compared to pure MPLS transport).

Bundled products such as voice + Internet + VPN for data transport seem to be seeing a great amount of success in the SMB space, as such products can save people a lot of money. Tier 2 carriers are emerging as better solution providers compared to Tier 1 participants, largely due to the focused approach they have on specific verticals and size of enterprises they go after with their solutions, thus creating a market niche.

"Large carriers are seeing a surge in demand for high bandwidth transport services – especially MPLS VPN for multipoint-to multipoint connectivity for large distributed enterprises," says Roopa Shree H. "Also, large carriers are showing increased interest in integrating Telepresence type of solutions with MPLS, which obviously makes sense for large enterprises."

Some interesting trends are expected to sweep over the transport services segment in the next four to five years with solution selling greatly taking precedence over pure transport or bandwidth. Business voice over Internet protocol/session initiation protocol (VoIP/SIP) trunking and hosted/managed security services bundled into transport are expected to clearly dominate the market landscape.

U.S. Data Transport Services Market Overview is part of the Communications Services Growth Partnership Services program, which also includes research in the following markets: Carrier Ethernet Services, Wavelength Services, Private Line and SONET Services, MPLS VPN Services, ATM & FR services, Business VoIP Services, Cloud Computing, Managed Services, and others. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 40 offices on six continents.

U.S. Data Transport Services Market Overview / N733

 
 
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Demand for Private Line and SONET Services Sustain Growth for the U.S. Data Transport Services Market Finds Frost & Sullivan

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