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Ethernet switch market to hit $25 billion; Verizon feels mobile carrier war

In telecom news, the Ethernet switch market is expected to reach $25 billion, while Verizon's Q4 report shows the impact of mobile carrier competition.

This week in telecom news, the Ethernet switch market is expected to hit $25 billion in 2019 thanks to growing interest in the cloud and software-defined networking. Meanwhile, Verizon's fourth quarter saw a hit in customer retention as mobile carrier competition heats up.

Google is set to expand its fiber Internet service to four new cities: Altanta, Ga., Charlotte, N.C., Raleigh-Durham, N.C. and Nashville, Tenn.

Ethernet switch market to reach $25 billion

The Layer 2 and Layer 3 Ethernet switch market is expected to exceed $25 billion by 2019, driven mostly by data center switching, according to Dell'Oro Group.

Data center switching growth will be driven by the cloud as the on-premises market slowly declines and software-defined networking (SDN) adoption increases, Dell'Oro reported.

"The cloud's need to scale, be flexible and differentiate are ultimately all governed by what can be achieved in software," said Alan Weckel, vice president of Ethernet switch market research at Dell’Oro.

In its five year forecast, Dell'Oro predicted that 25G Ethernet will be a major growth driver for data center switching and will propel 100G Ethernet.

Infonetics Research also reported on the Ethernet switch market's growth. The global data center Ethernet switch market grew 5% to $2.2 billion in the third quarter of 2014. Infonetics also reported that the 25G and 50G Ethernet will be driven by cloud service providers looking to migrate from 10G Ethernet switching and server connectivity to 100G switching and 25G server connectivity.

Verizon's Q4 report shows mobile carrier competition

Verizon is feeling the heat of mobile carrier competition as its contract customer turnover rate increased to 1.14% despite adding 2.1 million new connections in the fourth quarter of 2014.

The higher turnover rate, which rarely rises above 1%, is attributed to T-Mobile and Sprint offering to cover the cost of customers' early termination fees, cutting prices on services and offering higher data plans.

"Verizon's results showed strong evidence of competitive pressures," analyst Jonathan Chaplin told CNet.

Verizon posted a Q4 loss of $2.23 billion, compared with a profit of $5.07 billion in 2013. The losses were attributed to one-time charges related to pensions and debt. Verizon said it expects revenue to grow at least 4% in 2015 and plans to invest $17.5 to $18 billion in capital expenditures.

Google Fiber to expand to four cities

Google is expected to announce expansions of its high-speed fiber Internet service in four cities: Altanta, Ga., Charlotte, N.C., Raleigh-Durham, N.C. and Nashville, Tenn.

Google sent invitations to local officials and news outlets in those cities to attend events this week, without revealing the topic of the events. Google Fiber's website lists the four cities as planned fiber expansions.

Google currently has fiber deployments in Kansas City, Mo., Austin, Texas, and Provo, Utah. Google offers its 1 Gbps fiber service for $70 per month and a slower broadband service for free if customers pay a one-time $300 installation fee.

Google is also considering expanding its fiber service to Salt Lake City, Utah; San Antonio, Texas; Phoenix, Ariz.; Portland, Ore. and San Jose, Calif. Google said that while those cities aren't part of its latest announcement, they haven't been ruled out for future deployments.

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Spot on: Despite rising adoption of wireless networks, the backbone of networking relies on wired networks thus the growth trend in the switch market.
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