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Juniper Trumps Cisco's China Deal

China Telecommunications Corp. (NYSE: CHA) has dealt out the contracts for a major IP-network buildout, and, while Cisco Systems Inc. (Nasdaq: CSCO) was first to claim credit, Juniper Networks Inc. (Nasdaq: JNPR) may have even more to crow about.

Specifically, Juniper announced yesterday evening that it had won what sounds like the plum of the contracts: all the core routing for the ChinaNet Next Carrying Network (CN2), China Telecom's next-generation IP network. Juniper also picked up one of four regional-backbone deals handed out for CN2; Juniper's portion covers the south of China (see Juniper Wins China Telecom Deal). Juniper's press release claims the "largest share" of the CN2 deal, but a Juniper spokeswoman says this refers to the different types of networks being deployed, and not to the dollars involved. Juniper, she adds, is not claiming to have won a majority of the money China Telecom will spend on CN2.

Cisco is taking a similar stance. It announced last week it had been named the "primary equipment provider" for the "business network" within CN2 (see Cisco Wins China Telecom Deal). But a spokesman declines to give the basis for this claim or talk about the value of the contract.

All this jockeying for position may have arisen from a scheduling mishap. A source close to Cisco and Juniper, who requested anonymity, says the CN2 contracts were awarded sometime around Nov. 10, with all winning bidders asked to keep the results secret for eight days. Cisco denies this, saying China Telecom gave the press release the green light. "We absolutely got China Telecom's approval," a Cisco spokesman says, adding that Cisco was not asking for special permission to announce earlier than other winners.

The source says Juniper's piece of the deal is worth 55 percent of equipment revenues and Cisco’s is worth 37 percent. The remaining 8 percent of the CN2 revenues will be split almost evenly between Alcatel SA (NYSE: ALA; Paris: CGEP:PA) and Huawei Technologies Co. Ltd., which will supply equipment for networks in northwestern and northern China, respectively, according to the source.

These figures ought to be taken with a big pinch of salt. Cisco says the 37 percent share is too low but declines to be any more specific. And as already noted, Juniper doesn't claim to have won the majority of equipment revenues on the project.

Possibly the most interesting contract in the mix is Juniper's core-router win. It seems to imply the company's T320 and T640 beat out Cisco's offerings, which would have included the GSR 12000 and possibly the CRS-1. Juniper also may have beaten out Huawei, which has core routers of its own and also resells routers from Avici Systems Inc. (Nasdaq: AVCI; Frankfurt: BVC7). (See Avici Joins Huawei for China Push.)

— Craig Matsumoto, Senior Editor, Light Reading


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change_is_good 12/5/2012 | 1:04:27 AM
re: Juniper Trumps Cisco's China Deal in the big scheme of things, both companies are are doing ok. that is what counts. let's go...
literight 12/5/2012 | 1:04:27 AM
re: Juniper Trumps Cisco's China Deal Looks like this news hit the street just as csco was ready for their last earning call-- Chamber's hiccuping must have been the result of this bitter pill.

Well, the road from here on should be quite entertaining. Hype the CSR all they want but results speak for themselves.
hyperunner 12/5/2012 | 1:04:22 AM
re: Juniper Trumps Cisco's China Deal Whatever happened to that OEM deal between Juniper and Lucent? I can't remember seeing any announcements of wins associated with the deal which is unusual because an OEMing company normally has a big deal lined up which justifies the deal in the first place.

But I do remember something about a Lucent win in China that involved Juniper gear. But that win predated the OEM, and I guess both companies were working the deal separately.

hR.
chook0 12/5/2012 | 1:04:19 AM
re: Juniper Trumps Cisco's China Deal I believe you are talking about the China Unicom core network deal. From memory, it uses quite a lot of jointly developed technology.

--Chook


------------------------
Whatever happened to that OEM deal between Juniper and Lucent? I can't remember seeing any announcements of wins associated with the deal which is unusual because an OEMing company normally has a big deal lined up which justifies the deal in the first place.

But I do remember something about a Lucent win in China that involved Juniper gear. But that win predated the OEM, and I guess both companies were working the deal separately.
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zher 12/5/2012 | 1:04:15 AM
re: Juniper Trumps Cisco's China Deal "Looks like this news hit the street just as csco was ready for their last earning call-- Chamber's hiccuping must have been the result of this bitter pill."

No way, if you know how much discount cisco offered, you would not say this.

A couple of months ago, I heard CN2 would not offer any major package to Cisco (CN2 is splitted into 6 major packages), later on, Cisco had to offer 92% off discount in order to get some share.

Seems a lot of stories inside. :)
materialgirl 12/5/2012 | 1:04:15 AM
re: Juniper Trumps Cisco's China Deal Yes, but then there is also VZ. VZ is clearly a giant LU client and was a surprise 10% customer of JNPR in the September quarter. In the conference call, not only was LU still not a 10% customer, they were not mentioned in the deal. I found that strange.
zher 12/5/2012 | 1:04:14 AM
re: Juniper Trumps Cisco's China Deal You must be talking about Erricssan?
sigint 12/5/2012 | 1:04:13 AM
re: Juniper Trumps Cisco's China Deal A couple of months ago, I heard CN2 would not offer any major package to Cisco (CN2 is splitted into 6 major packages), later on, Cisco had to offer 92% off discount in order to get some share.
__________________________________________________

I'd assume other vendors would have had to offer massive discounts too. Any idea of the scale?

If this is really true, large US firms should have no trouble dealing with Hawei's attempts at bombing equipment prices.
zher 12/5/2012 | 1:04:12 AM
re: Juniper Trumps Cisco's China Deal " I'd assume other vendors would have had to offer massive discounts too. Any idea of the scale? "

I agree with you somehow, but I believe JNPR doesn't offer 92% off discount. :)

Don't understand what you said, " large US firms should have no trouble dealing with Hawei's attempts at bombing equipment prices. "
sigint 12/5/2012 | 1:04:10 AM
re: Juniper Trumps Cisco's China Deal zher:
Don't understand what you said, " large US firms should have no trouble dealing with Hawei's attempts at bombing equipment prices. "
__________________________________________________

This was an apprehension expressed in another thread about Huawei's aggressive pricing.

http://www.lightreading.com/bo...

all of them will be affected. I dont think anybody
has much of a clue what to do when people offer the same or slightly less functional gear for 30% of the price. and enterprise customers atleast will go for the wal_mart mentality of buying whatever is cheaper!! :(
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