Cisco Scores Win with France Telecom
SAN JOSE, Calif. (Reuters) - Cisco Systems Inc., the biggest maker of computer-networking equipment, said on Wednesday that telecommunications giant France Telecom SA will use Cisco's most powerful routers to help direct traffic on its high-speed North American backbone network.
Cisco (NasdaqNM:CSCO - news) and rival Juniper Networks Inc. (NasdaqNM:JNPR - news) are battling each other in the market for the speediest and most expensive routers, and the deal is an important win for San Jose, California-based Cisco. France Telecom will use Cisco's GSR 12416 routers in its optical, Internet Protocol network.
A Cisco executive declined to specify how much the win was worth for Cisco in terms of revenue. However, the executive, Roland Acra, general manager of Cisco's service provider line of business, said that: ``Our very large customers who in the past have built the largest backbones are multi-hundred-million dollars in terms of revenue'' over the life of the backbone network.
Cisco's Chief Executive John Chambers has said that five-year old Juniper is among the top competitors he keeps an eye on. Juniper has gone from zero share in the market for high-end routers to being now the No. 2 player behind Cisco.
When it reported second-quarter results, Juniper Chief Executive Scott Kriens said his company won more deals than it lost in the second quarter, including a previously announced contract to provide backbone routers to an initial 14 Chinese cities in conjunction with China Cable Network Co. Ltd.
The high-end routers from Cisco will let France Telecom (FTE.PA) offer enhanced services, such as voice over Internet Protocol, multicasting and sophisticated routing of data packets in terms of their priority, Acra told Reuters.
``The ability to perform features at very high speed, including quality of service and controlled delay for traffic across the network becomes crucial any time someone wants to offer high-end services,'' Acra said.
France Telecom's backbone uses an undersea optical cable that runs between New York and Paris and will operate at speeds of 10 gigabits per second by using the Cisco high-end routers, which can handle data transmission at that rate, the highest currently available in the industry.
``We believe, by a very long shot, we are the primary vendor in that relationship, for this 10 gigabit Internet backbone,'' Acra said.
Sales of networking gear have fallen off a cliff so far this year, as slowing economies and overinvestment in telecommunications gear has sapped demand. But Cisco continues to maintain that, once global economies get back on track, it can increase sales by 30 percent to 50 percent a year.
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