APAC's Enterprise Ethernet services market to reach US$10.9b by 2012
ConvergenceAsia staff
05/11/2007

Enterprise Ethernet services in Asia Pacific are still leading the world due to early leadership from Japan. The market reached US$5.5 billion in 2006 and will grow at a 12 per cent CAGR to reach $10.9 billion by 2012. Excluding Japan, average revenue growth is a much higher 30 per cent.

Senior Ovum analyst, Matt Walker, says Ethernet-based services are already widely deployed in Japan, Hong Kong, and Australia, and most big AP operators have commenced rollouts. “Our 2007 forecast is slightly more conservative than last year's due to slower-than-expected ramp-ups in China, India, Indonesia, Malaysia, and Thailand,” says Walker. Growth rates for the four main service categories - metro E-Line, metro E-LAN, intercity E-Line, and intercity E-LAN - are all strong. But, says Walker, “metro E-Line benefits the most from new deployments in Asia's emerging economies.”

Point-to-point Ethernet-over-fibre connections will remain dominant through 2012, but will lose share to Ethernet over copper (EoCu); architectures based on next-generation SDH, MPLS, and WDM will account for roughly the same share of revenues in 2012 as today.

Ovum RHK forecasts strong demand growth through 2012 for enterprise Ethernet services in Asia Pacific. Growth in ports in service and revenues has been strong through 2006, and both will advance at double-digit rates through 2012. This increase is based on strengthening demand for bandwidth to support next-generation enterprise applications such as disaster recovery, storage, and video. Operators also see plentiful demand for legacy-type private-line services carried over flexible, cheap, and easy-to-use Ethernet platforms.

The Asia Pacific market for these services is currently dominated by Japan - which claimed approximately 83 per cent of 2006 revenues. But Walker explains, “emerging markets account for much of the growth built into the forecast. We expect Japan's share to diminish to 60 per cent of AP revenues by 2012.”

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