As a newcomer to the Ethernet service market, it would stand to reason that Time Warner (News - Alert) would be scrambling to gain market share in a somewhat saturated industry. The company is in effect making rapid gains, while Qwest Communication seems to be falling behind. These evaluations are the result of new data from Vertical Systems Group.

The analysis group released market share data for the U.S. retail business Ethernet services sector at the end of 2007. This release is an update from the same information released six months earlier.

Vertical Systems Group highlighted that the lineup of top tier providers of Business Ethernet Services in the U.S. continues to diversify. The leading incumbent carriers continue to be AT&T, Verizon (News - Alert) and Qwest based on enterprise customer port installations.

Time Warner Telecom and Cogent found a comfortable place at the top of the roster for competitive providers, while Cox and Time Warner Cable lead the MSO segment. More than 40 other companies are also delivering retail Ethernet services to business customers in the U.S.

"Enterprise demand for Ethernet services spiked at the end of 2007, boosted by broader service availability, plus heightened competition from more MSOs, regional, and global providers," said Rick Malone, Principal at Vertical Systems Group, in a statement.

"Latest port share results show that while incumbent carriers hold a sizeable slice of the market now, MSOs and competitive providers are targeting diverse segments of this ripe and rapidly growing market. As a result, major share shifts by provider, as well as by provider segment, are expected during the first half of 2008."

Time Warner Cable has captured much attention in this market as it has been able to claim 5 percent at year’s end. Malone noted that TWC had a major spike in its Ethernet business in 2007.

Qwest (News - Alert) Communications appears to be suffering as its share of the market took a dive from 8.4 percent in the summer to 6 percent in December. Cogent Communications also suffered a loss as its share slipped from 8.6 percent to 7 percent.

Malone went on to highlight that Cogent enjoyed steady port growth throughout 2007, but lost share due to generally slower growth than the market and a growing concentration of its sales in the wholesale segment.

Qwest suffered due to its inability to secure enough large Ethernet contracts for the back half of 2007 to keep up with the growth rate of the overall market, according to Malone. This lack of activity resulted in continued share attrition. At the end of 2006, Qwest held 10 percent of the market.

AT&T has been proven the market leader with a 22 percent share of year-end 2007 Business Ethernet ports. Verizon is second with a 17 percent port share, followed by Time Warner Telecom at third position and 13 percent of U.S. installations. Cox remains in fourth place with a 10 percent port share, followed by Cogent at 7 percent and Qwest at 6 percent.

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Susan J. Campbell is a contributing editor for TMC (News - Alert) and has also written for eastbiz.com. To see more of her articles, please visit Susan J. Campbell’s columnist page.

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