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A new report from Infonetics Research (News - Alert) forecasts major growth in the global Ethernet and IP MPLS VPN markets. Specifically, the report predicts that market revenue will top $81 billion by 2016.

The growth in the industry is powered by surging data traffic and cloud adoption. “Despite some slowdown in Europe in 2011 and 2012, we see solid growth ahead for both IP MPLS VPNs and Ethernet services, together topping $81 billion worldwide by 2016,” says Michael Howard (News - Alert), co-founder and principal analyst for Infonetics.

Researchers found that global service revenue from Ethernet and IP MPLS VPNs increased 31 percent in 2011 to just over $50 billion. The Asia-Pacific region already outpaces the AMEA in Ethernet services. Thanks to demand from China and India, the Asia Pacific will soon dominate growth in IP MPLS VPN.

The growth of revenue for both Ethernet and IP MPLS VPNs solidly outpaced the growth of telecom service provider revenue during the same period. Infonetics also discovered that 90 percent of mobile backhaul spending in 2011 was on IP/Ethernet gear.

“The move from legacy frame relay, ATM and leased line services onto Ethernet and IP services is quickening as businesses put a razor-sharp focus on staying competitive in today's highly interconnected, mobile, video- and cloud-oriented world,” said Howard. “By 2015, ATM and frame relay will virtually vanish, while private leased lines will be around a bit longer.”

The Infonetics 2012 Ethernet and IP MPLS VPN Services report features analysis and forecasting for both the managed and unmanaged Layer 2 and Layer 3 IP MPLS VPN services along with both wholesale and retail Ethernet services. Data in the report is presented by country and includes market size, market trends and trends analysis through 2016.

Infonetics also reported recently that the Ethernet access device market would grow 81 percent by 2016 and that $186 billion will be spent on carrier Ethernet equipment over the next five years.

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