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MPLS Service Spending to Reach $2.4 Billion by 2015

Wireline telecommunications data services is a growing business communications category that includes expenditures on wide area network (WAN) data transport services.

These enterprise communication services include dedicated cable, DSL, network-based IP VPN, T1, frame relay, ATM, and Ethernet services. MPLS (multiprotocol label switching) service is also part of this group.

It's a high-performance telecom network offering that directs and carries data from one network node to the next with the help of labels -- making it easy to create virtual links between distant nodes.

According to the latest market study by In-Stat, MPLS network services are becoming more popular and business spending will reach $2.4 billion in 2015.

“MPLS is communication protocol agnostic and highly scalable,” says Greg Potter, Analyst at In-Stat.

It was designed to provide a unified data-carrying service for both circuit-based clients and packet-switching clients. A number of different technologies were previously deployed with similar goals, such as frame relay and ATM services.

Newly collected market data suggests that the increase in MPLS spending has had a negative impact on some of these other communication technologies.

In-Stat's latest market study insights include:
  • Frame relay spending will decline 55 percent from 2010 to 2015.
  • Spending on cable data services will increase 34 percent over the forecast period.
  • Small businesses (20-99 employees) will spend a little over $6.2 billion in 2012.
  • The healthcare and social services vertical will experience the largest overall gain, increasing $1.2 billion over the forecast period.

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