AT&T still top dog of U.S. carrier Ethernet market - Vertical Systems Group

AT&T continues to hold the crown of Vertical Systems Group’s U.S. Carrier Ethernet leaderboard, after surpassing Lumen earlier this year.

According to VSG’s mid-2023 report, the rankings of the top six Ethernet providers remain unchanged, which VSG Principal Rick Malone said was “mildly surprise[ing],” as the firm usually expects leaderboard positions to shift.

“That said, Ethernet is a mature market and today’s major moves are more frequently associated with port disconnects than port additions,” Malone told Fierce.

After AT&T and Lumen came Charter’s Spectrum Enterprise in third place, followed by Verizon, Comcast and Cox. Each provider on the leaderboard has an Ethernet port share of 4% or greater in the U.S.

Malone said AT&T has a “respectable lead” over Lumen, due to the latter selling off 20 ILEC assets to Brightspeed at the end of 2022. Prior to this year, Lumen had claimed the top spot of VSG’s Ethernet leaderboard since 2017.

“While we can’t predict future market share results, dislodging AT&T from the top spot by year-end would be a major achievement,” he added.

The report also found Dedicated Internet Access (DIA) accounted for the most new Ethernet service installations in the first half of 2023, as enterprises continue to migrate to cloud services, hybrid wide area networks (WANs) along with managed SD-WAN and secure access service edge (SASE).

Other new Ethernet installations included point-to-point Ethernet Private Lines and point-to-multipoint Ethernet Virtual Private Lines, Malone noted.

While enterprise customers upgrade from lower-speed Ethernet services to 100G and higher, they’re also considering alternatives like wavelength services and dark fiber. A previous VSG analysis pegged Lumen and Zayo as the top wavelength services providers in the U.S.

As for why businesses might switch to wavelength and dark fiber, Malone said, “Wavelengths are managed point-to-point gigabit speed circuits, engineered to customer requirements for latency, low jitter, and security.”

“Dark Fiber solutions are typically purchased by customers requiring multiple high speed connections between two points or proprietary application interfaces, with management handled by the customer or a service provider,” he added.

Hybrid MPLS/SD-WAN networks continue to be popular, as Malone said enterprise customers often retain MPLS for sites that have “business critical applications requiring high security, performance and reliability.”

Whereas the SD-WAN network is placed in cloud and internet-based applications.

Ethernet service providers saw some improvement in supply chain challenges in the first half of 2023, “with far fewer delayed equipment orders for new service deployments and upgrades,” said Malone.

As cable operators prep their network for DOCSIS 4.0 rollouts, he said DOCSIS 4.0 could be an alternative to Ethernet for some applications, “dependent on capacities, pricing, and availability.”

However, Malone pointed out “Ethernet provides higher rate symmetrical speeds.”