Week in research: Carrier Ethernet rises; Puerto Rico wireline stagnates

Carrier Ethernet continues climb: Carriers spent $26.5 billion on Carrier Ethernet equipment last year as the migration from legacy TDM to packet-based networks continued. That created a bright spot for Cisco (Nasdaq: CSCO), which took in nearly half of 2010's revenues, as well as Juniper Networks (NYSE: JNPR). "The growth in service provider investments in carrier Ethernet equipment continues to outpace that of other telecom equipment, with annual global spending expected to reach $37.5 billion in 2015. The largest investments are in routers, carrier Ethernet switches (CES), and optical gear. Ethernet-based microwave is the fastest growing segment due to its use for mobile backhaul," notes Michael Howard, Infonetics Research's principal analyst for carrier and data center networks.  News release

Infonetics carrier Ethernet

Cable trouble ahead? The impact of online and over-the-top video technologies continues to be felt by the multichannel video programming industry, and a new forecast by SNL Kagan adds more storm clouds to the mix. Retransmission fees--the rates charged by broadcasters to allow cable operators to carry their programming--are already on the rise, reaching $1.14 billion in 2010, and at current rates could double to $3.61 billion by 2017. TV stations are extremely dependent on these revenues: last year's revenue stream for pure-play TV stations was equal to 52 percent of their cash flow and in some cases reached 76 percent. What does that mean for subscribers? Likely, higher cable bills. News release

Lagging behind: Puerto Rico's telecom market is quite large and boasts some of the highest rates of teledensity, mobile penetration and Internet usage in Latin America, but that doesn't mean everything is rosy on the island. Fixed and broadband wireline penetration lags well behind the rest of the United States, and the dominance of incumbent telco PRTC (Puerto Rico Telephone Company) has caused the fixed-line telephony market to stagnate. The likeliest growth area for wireline voice lies in VoIP, cable and satellite services. News release