Cisco Systems Inc. (Nasdaq: CSCO) and Siemens Information and Communications Networks Inc. are believed to be working together on the development of a GPRS Gateway Service Node (GGSN) product, despite the German vendor’s existing relationship with Cisco chief rival Juniper Networks Inc. (Nasdaq: JNPR).

“Cisco is building a new range of GGSNs for Siemens,” a source tells Unstrung. “I have heard they are changing their GGSN supplier from Juniper to Cisco.”

GGSNs, also known as wireless routers, are the primary interface between a carrier’s radio and packet core networks. In their next-generation guises, wireless routers can also handle service creation, billing, and IP traffic management tasks.

Both Cisco and Siemens refuse to confirm the deal, although Cisco spokeswoman Henriette Borch admits in an email that the company is "working with Siemens ICM N (Siemens Mobile) on a number of customer deployments.” Borch stresses that “it is still very early days and there have been no specific product developments done,” but adds that she hopes “to be able to make a formal announcement about the alliance in the coming weeks.”

Juniper was unavailable for comment.

Such a deal would certainly shake up the market, in light of Siemens’s ties with Juniper. Siemens has a 10 percent stake in the U.S. vendor following Juniper’s acquisition of Unisphere Networks, and both companies have been working together to jointly develop a GGSN (see Juniper Nabs Unisphere for $740M and Juniper's Bizarre Love Triangle). Juniper already has the J20 wireless router, which was jointly developed with LM Ericsson (Nasdaq: ERICY), in its portfolio (see Juniper's J20 Is Jumping).

“On the Cisco side, it would be a great boost to the vendor’s wireless business,” comments Peter Jarich, senior analyst for wireless infrastructure at Current Analysis. Speaking of Cisco's current partners, he notes that "Lucent and Motorola are strong CDMA players, and Alcatel adds some GSM/UMTS clout, but Siemens would clearly boost Cisco’s prospects at selling more GGSNs.”

The Cisco/Siemens rumors are the latest in a long line of high-profile developments in the GGSN space. Only last month, Japanese giant NEC Corp. (Nasdaq: NIPNY; Tokyo: 6701) -- Siemens’s 3G infrastructure partner -- announced plans to break into the market on its own (see NEC Plots Router Push).

— Justin Springham, Senior Editor, Europe, Unstrung