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Gigabit services account for 54% of carrier ethernet revenue  

Gigabit services are the largest and fastest growing source of U.S. retail carrier Ethernet revenue, according to a new report from Vertical Systems Group.

Ports supporting speeds of 1 Gbps and faster now comprise more than one quarter (26%) of all ports installed at customer sites and account for more than half (54%) of U.S. carrier Ethernet revenue, the research firm said.

Vertical Systems Group projects solid growth through 2025 for gigabit port capacities, but also a revenue decline for slower-speed Ethernet connectivity.

Among the report’s other findings:

  • Total U.S. Ethernet revenue fell due to COVID-related disruptions and price compression, yet the number of Ethernet ports installed at customer sites continued to grow.
  • 1 Gbps is forecast to be the top speed segment based on Ethernet revenue through 2025.
  • 100 Mbps continues to be the largest Ethernet speed segment based on customer port installations.
  • Ethernet private line (EPL) is the top Ethernet service segment based on revenue through 2022.
  • Direct internet access (DIA) is projected to have the highest compound annual growth rate through 2025 for both ports and revenue. Demand for DIA is driven 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 and will comprise an estimated 97% of total Ethernet bandwidth by 2025.

Vertical Systems Group also reported that:

  • Ethernet price compression continues across every service and speed combination.
  • Challenges to Ethernet market expansion include SD-WAN, wavelength services and dark fiber.



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