Juniper: Telco spending will come back in 2010

Juniper Networks is confident that service providers are going to open up their cash coffers in 2010.

Throughout 2008 and 2009, service providers have put many projects on hold due to the ongoing economic recession. Although that trend reflected a prudent strategy for carriers, it had the unfortunate impact of driving down revenues for telecom equipment vendors such as Juniper. In Q3 09, Juniper's net income declined from $148.5 million in Q3 08 to $83.8 million.

But what's making Juniper so confident is that they are going to need to accommodate the consumer's insatiable demand for high definition video and data services.

"Customers are looking to 2010 and how they're going to cope with the increased volume of high-definition videos coming from YouTube, but also the increased usage of mobile data. That is growing very, very significantly," Gert-Jan Schenk, head of Juniper's operations in Europe, the Middle East and Asia said in a Reuters article this week.

Regardless of Juniper's confidence about a telecom turnaround, some analysts are concerned about the company's M&A strategy especially around wireless. These concerns have become more prominent as last fall both Cisco and Tellabs garnered deals to purchase Starent Networks and WiChorus, respectively.  

While Schenk would not rule out making a wireless acquisition, he said the company is confident it can effectively serve the wireless network industry's network aggregation and backhaul needs through a series of partnerships.  

For more:
- read this Rueters article

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