The widely anticipated Juniper Networks Inc. (Nasdaq: JNPR) / Verizon Communications Inc. (NYSE: VZ) contract has finally been stamped, signed and delivered. Juniper announced today that Verizon has signed a multiyear contract to purchase its E-series routers (see Verizon Deploys Juniper Routers).

The routers will be used to build Verizon's new "Enterprise Advance" network aimed at Fortune 1000 companies, government agencies, and educational institutions. Specifically, the ERX routers will be aggregating a variety of access traffic, including leased line, Frame Relay, ATM, DSL, Ethernet, and wireless. ERX will enable Verizon to offer these customers services like MPLS Virtual Private Networks (VPNs), DSL aggregation, commercial wireless hotspots, and Transparent LAN Service (TLS).

So is it a big deal for Juniper? Yes -- but with qualifications. In the large sense, the deal is important because sources have said all along that the potential for a Verizon contract was behind Juniper's acquisition of Unisphere, the startup that originally developed the ERX (see Unisphere Close to $200-300M Deal? and Juniper Nabs Unisphere for $740M). Signing the deal means that the execution of the acquisition has so far gone according to plan.

The deal is also good because Juniper is getting a piece of an important IP backbone project at a major RBOC. Verizon announced the build-out of a new IP infrastructure back in November 2002 (see Verizon Does Enterprise Data). It began deploying the fiber optic and electrical pieces late last year. The next phase includes the new edge routing equipment. The entire IP deployment, including core routers, has been rumored to be worth about $300 million.

Now for the bad news: Financial details of Juniper's specific purchase agreement have not been released, so it's not clear now much of that booty will go to Juniper. Sources have said that Cisco Systems Inc. (Nasdaq: CSCO) will end up sharing a significant part of the business (see Juniper Loses Ground to Cisco at Verizon). Neither Verizon nor Juniper would comment on Cisco's participation.

Verizon admits that the edge contract is not exclusive, but it would not discuss which, or even if any, other companies have also been awarded a contract for part of the build-out.

“All I can tell you is that we have signed an agreement with Juniper,” says Mark Marchand, a Verizon spokesman. “That is what is out there. But we are always looking for other vendors with respect to the Enterprise program.”

The announcement focuses specifically on Verizon's edge deployment and mentions nothing about core routers. Marchand says the carrier has not yet decided which products it will use for this part of the network.

It’s also unclear whether or not Juniper has already recognized revenue from Verizon. Some Wall Street analysts believe that it has, but Juniper has not confirmed or denied this.

"Juniper's policy is to recognize revenue only after the products are shipped," says Susan Ursch, Juniper spokeswoman.

— Marguerite Reardon, Senior Editor, Light Reading