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Carrier Ethernet Market Booming

The market is being fueled by global service carriers struggling to meet the exploding demand for bandwidth while driving down prices.

Most of the information technology world may be mired in economic malaise, but the carrier Ethernet world isn't, according to a report released Monday that outlines the booming market for the segment. Infonetics Research projects the annual carrier Ethernet market will reach $34 billion in 2013.

Defying the economic recession, the carrier Ethernet market is fueled by global service carriers struggling to meet the exploding demand for bandwidth while they also work to drive down prices.

Infonetics said the largest investments are in IP core and edge routers, carrier Ethernet switches, and optical gear.

"Carrier Ethernet technology is integral to service provider IP next gen network projects aimed at transforming from TDM- to packet-based networks to handle ever-growing consumer, business, mobile backhaul, and video traffic," said Michael Howard, the market research firm's principal analyst for carrier and data center networks, in a statement. Howard said he expects service providers globally to spend $146 billion on carrier Ethernet gear over a five-year period ending in 2013.

He noted that next generation IP transformation projects depend heavily on IP, Ethernet, and multiprotocol label switching, with the big shift focused on the shift to Ethernet from synchronous optical network, or SONET, and synchronous digital hierarchy, or SDH.

"Service provider investment in carrier Ethernet continues to defy the economic downturn and outpace overall telecom capital expenditure investments," Howard said.

The carrier Ethernet market leader is Cisco, which is the pacesetter for Ethernet switches, IP core routers, and IP edge routers. In the core routers segment, Juniper Networks is a strong second and its overall market position is expected to be enhanced by the formation of its new partnership with Nokia Siemens Networks, called Carrier Ethernet Solutions. Juniper owns 60% of the joint venture.

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