UHB Ethernet Shows Slow Growth Despite Bandwidth Demand, Heavy Reading Finds

The market hasn't seen quick UHB Ethernet growth despite the industry's large bandwidth demands, says Heavy Reading Insider

Jul 8, 2013

BOSTON, July 8, 2013 /PRNewswire/ -- Despite the industry's large bandwidth demand, "ultra-high-bandwidth" (UHB) 40/100GE demand is not growing quickly, mostly due to high equipment costs, according to the latest report from Heavy Reading Insider (www.heavyreading.com/insider), a subscription research service from Heavy Reading (www.heavyreading.com).

40/100G Ethernet Services Forecast: Demand Will Hinge on Lower Costs reviews how U.S.-based and international carriers are addressing the UHB Ethernet market. It explores key issues in the adoption of 100GE and 40GE services, most importantly including equipment and service cost ratios with well-established 10GE, along with major adopters, market drivers and obstacles, opex savings, advantages of ICB offerings and the relationship between 100GE and 40GE services. It also includes brief discussions of the progress various carriers are making on these services, along with a market forecast of U.S.-based UHB Ethernet services.

For a list of companies covered in this report, click here.

"Although 'ultra-high-bandwidth' 40GE and 100GE have gained substantial ground as technologies within carrier networks, adoption of corresponding services sold by carriers is still in its infancy and progressing rather slowly," says Steve Koppman, research analyst with Heavy Reading Insider and author of the report. "Ethernet has continued to gain momentum as the predominant choice for 'big data' connectivity, giving rise to the start of a move up from now well-established, high-bandwidth 10GE to UHB Ethernet networking."

Despite continued tremendous growth in bandwidth demand, adoption of UHB Ethernet service remains relatively slow, hampered by high equipment costs, Koppman says. "The key issue is the 'cost ratio' – the relationship between costs of the new higher-bandwidth level (primarily 100GE) to the well-established lower-bandwidth level (10GE)," he continues. "Carriers broadly believe this ratio will reach about 6:1 over the next two years – a point where a 100GE line can be purchased on average for a similar price as six 10GEs. But despite significant growth of 100GE, the mainstream high-bandwidth increment will remain 10GE for years into the future, especially at the enterprise level."

Key findings of 40/100G Ethernet Services Forecast: Demand Will Hinge on Lower Costs include the following:

  • Despite huge bandwidth growth, adoption of ultra-high-bandwidth Ethernet service is slow, hampered by high equipment prices.
  • 6:1 is the likely 100:10GE cost ratio by end of 2014 – by carrier consensus, a ratio that could speed adoption.
  • By contrast, current 100:10GE cost ratios range from more than 10:1 to 7:1.
  • 100GE services sales will exceed $200 million in the U.S. by 2016.
  • In a "chicken and egg" dilemma, prices will be held down by vendor competition, customer adoption and technical advance.
  • Carriers and content distributors are and will be the primary early 100 GE adopters, with retail lagging.
  • Though 100GE remains smaller than 40GE as a segment, it will soon dramatically overtake it.
  • Europe is moving faster than the U.S. toward 100GE adoption.

40/100G Ethernet Services Forecast: Demand Will Hinge on Lower Costs is available as part of an annual single-user subscription (12 issues) to Heavy Reading Insider, priced at $1,995. Individual reports are available for $900 (single-user license).

To subscribe, or for more information, please visit: www.heavyreading.com/insider. For more information about other Heavy Reading Insider research services, please visit: www.heavyreading.com/research.

To request a free executive summary of the report, or for details on multi-user licensing options, please contact:

David Williams
Global Director of Sales, Research
Heavy Reading

Press/analyst contact:
Jennifer Baker
Marketing Director, Light Reading Communications Network

About Heavy Reading (www.heavyreading.com)
Heavy Reading is an independent research organization offering deep analysis of emerging telecom trends to network operators, technology suppliers, and investors. Its product portfolio includes in-depth reports that address critical next-generation technology and service issues, market trackers that focus on the telecom industry's most critical technology sectors, exclusive worldwide surveys of network operator decision-makers that identify future purchasing and deployment plans, and a rich array of custom and consulting services that give clients the market intelligence needed to compete successfully in the global telecom industry. As a division of UBM Tech (tech.ubm.com), Heavy Reading contributes to the only integrated business information platform serving the global communications industry.

SOURCE Heavy Reading