New in-depth ENS research analyzes the dynamics of Ethernet revenue, ports, bandwidth and pricing through 2025, incorporating the effects of COVID-19 and the Delta variant

BOSTON, MA, October 6, 2021 – Vertical Systems Group’s latest ENS (Emerging Networks Service) research shows that Gigabit services are the largest and fastest growing source of U.S. retail Carrier Ethernet revenue. The Ethernet services delivered using 1 Gbps and higher speed ports now contribute more than half (54%) of U.S. Ethernet revenue, and comprise just over one quarter (26%) of ports installed at customer sites.

Solid revenue growth is projected through 2025 for gigabit port capacities, in contrast to revenue erosion for lower speed Ethernet connectivity. Vertical’s analysis includes detailed projections for six services across five speed segments. The speed segments are 10+ Gbps, 1 Gbps, 100 Mbps, 10 Mbps, and Sub-10 Mbps. Service segments covered include DIA (Dedicated Internet Access), Ethernet Access to IP/MPLS, EPL (Ethernet Private Lines), EVPL (Ethernet Virtual Private Lines), Metro LAN and WAN VPLS (Wide Area Network Virtual Private LAN Service).

@Ethernet Research Highlights

• Total U.S. Ethernet revenue dipped as a result of COVID-related disruptions and price compression, however the number of Ethernet ports installed at customer sites continued to expand.
• 1 Gbps is the top speed segment based on Ethernet revenue through 2025.
• 100 Mbps remains the largest Ethernet speed segment based on customer port installations.
• EPL is the top Ethernet service segment based on revenue through 2022.
• DIA has the highest projected CAGRs through 2025 for both ports and revenue. Demand for DIA is boosted by requirements for secure, dedicated connectivity to cloud services and data centers, as well as access links for SD-WAN underlays.
• Bandwidth utilization for U.S. Ethernet customer ports is climbing at double digit rates. By 2025, gigabit speed services will contribute an estimated 97% of total Ethernet bandwidth.
• Requirements for gigabit Ethernet services are spurring new fiber buildouts. All of the Ethernet Service Providers ranked on Vertical’s Mid-2021 U.S. Carrier Ethernet LEADERBOARD also hold a rank position for fiber provider leadership on the latest U.S. Fiber Lit Buildings LEADERBOARD.
• Ethernet price compression continues across every service and speed combination as billed to customers (i.e., average ‘street price’ net of discounts).
• Challenges to Ethernet market expansion include SD-WAN, wavelength services and dark fiber.