SOURCE: Infonetics Research

May 02, 2007 18:35 ET

Ethernet service market hits $9.4B, IP MPLS VPN services hit $10.9B in 2006

CAMPBELL, CA -- (MARKET WIRE) -- May 2, 2007 -- With corporate data traffic growing unabated, organizations around the world are rapidly exceeding the capacity limits of their legacy frame relay, ATM, and private line networks, and as they do, they are increasingly replacing these legacy services with Ethernet and IP MPLS VPN services, which are more flexible and less restricted than their legacy counterparts.

This shift is happening swiftly. After more than doubling in 2005 to $5.7 billion, worldwide Ethernet service revenue jumped another 65% in 2006 to reach $9.4 billion, and IP MPLS VPN service revenue grew 38% in 2006 to $10.9 billion, according to Infonetics Research's latest market size and forecast report, "Ethernet and IP MPLS VPN Services."

"Ethernet and IP/MPLS are the layer 2 and layer 3 service protocols of choice for today's data service networks. Small and medium businesses and remote and branch offices of large businesses especially like Ethernet and IP MPLS VPNs because they offer considerably more bandwidth with little or no increased WAN costs. These are the very customers service providers are targeting for new revenue, and they're succeeding: based on the revenue increases we're seeing, it's obvious there's been and will continue to be a strong uptake in new subscribers to Ethernet and IP MPLS VPN services," said Michael Howard, principal analyst at Infonetics Research.

Market Highlights

--  The Ethernet service market is forecast by Infonetics to surge 171%
    from 2006 to 2010, when it will top $25 billion worldwide
--  77% of Ethernet service revenue came from retail sales in 2006
    (Ethernet services purchased by business, government, consumers, or
    education from service providers)
--  All sources of retail Ethernet service revenue (Internet/WAN, Ethernet
    private line, and transparent LAN) increase through 2010
--  Service revenue for mid-band Ethernet, or MBE, which includes the 1-
    10M and > 10-50M speed bands, will nearly triple from 2006 to 2010
--  EMEA's share of worldwide IP MPLS VPN service revenue is 35% in 2006,
    North America's is 32%, Asia Pacific's 29%, and CALA's 4%

Infonetics' report includes market size totals, annual revenue forecasts through 2010, and analysis of the Ethernet and IP MPLS VPN services markets for North America (including US and Canada splits), EMEA, Asia Pacific, CALA, and worldwide. It tracks wholesale and retail Ethernet service revenue by capacity (mid-band Ethernet [1M-10M and > 10-50M], > 50M-100M, > 100M-1G, and > 1G), and retail Ethernet service revenue by source as well (Internet/WAN access, Ethernet private line, and transparent LAN).

Download sample data at For sales, contact Larry Howard, vice president, at or +1 (408) 583-3335.

Infonetics Research ( is an international market research and consulting firm specializing in data networking and telecom, providing a complete view of the market through constant interaction with equipment manufacturers, service providers, end-users, chip and component manufacturers, sales channels, and the financial community. Services include quarterly market share and forecasting, end-user survey research, service provider survey research, and service provider capex analysis.

Contact Information

  • Press Contact:
    Michael Howard
    Principal Analyst and Co-Founder
    Infonetics Research
    (408) 583.3351
    Email Contact