Juniper Networks' (NYSE: JNPR) 6 percent gain in the service provider router and carrier Ethernet switch revenue market during the first quarter was promising, a Synergy report said, at a time when the overall market segment declined 6 percent.
Synergy Research Group said that all of the service provider router and Carrier Ethernet vendors have been operating in a "soft" market where revenues declined below the $3 billion threshold. On a regional basis, Juniper's North America revenues declined sequentially, but rose 10 percent year-over-year.
During the first quarter, Juniper's routing revenue was $488.1 million, up year-over-year from $458 million in Q1 2012. Overall service provider revenue was $713 million, down 4 percent sequentially, but up 4 percent on a year-over-year basis.
The Sunnyvale, Calif.-based vendor's Q1 rise enabled it to "close the gap on Alcatel-Lucent," which reported that it won Belgacom and the University of Pittsburgh Medical Center (UPMC) as two new customers for its 7950 XRS core router platform.
Like Juniper, Alcatel-Lucent (NYSE: ALU) reported that its IP division's revenues rose 6.3 percent to €493 million ($642 million).
Jeremy Duke, Synergy's founder and chief analyst, said that "the signs are that both it and Alcatel-Lucent will give Cisco sterner competition this year."
A key barometer of growth for Juniper and other routing vendors will be how the large carriers will allocate their capital. AT&T (NYSE: T), which consists of 10 percent of the vendor's sales, said during its Q1 earnings call that it reduced its capex forecast for 2014 and 2015.
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