Juniper's GGSN Gamble?

Could Juniper Networks Inc. (Nasdaq: JNPR) build a "wireless router" of its very own in an attempt to address a larger market than it can through its joint venture with Ericsson AB (Nasdaq: ERICY)?

Yes, say analysts, particularly if the company's relationship with Ericsson degenerates because of Juniper's acquisition of Unisphere Networks Inc. (see Juniper Nabs Unisphere for $740M). That buyout gave one of Ericsson's bitter mobile infrastructure rivals, Siemens AG (NYSE: SI; Frankfurt: SIE), a stake of nearly ten percent in the newly merged networking company (see What to Expect From 'Junisphere').

"I think it is likely," says Mark Bieberich, senior analyst of communications network infrastructure at Yankee Group, about the prospect of Juniper building its own wireless routers, which are called gateway GPRS service nodes (GGSNs) in GSM-derived networks and packet data service nodes (PDSNs) in CDMA networks.

"When it is likely is hard to say," according to Bieberich. "Given the resources within Juniper today, they certainly have the capability of developing a GGSN in house."

Wireless routers, which link next-generation GPRS and CDMA2000 radio networks to the IP backbone and enable carriers to develop new data services, are one of the few IP networking markets that are likely to grow in the short term. This is why the mobile space is so interesting for Juniper, which is number two in IP networking after Cisco Systems Inc. (Nasdaq: CSCO), according to Bieberich.

Juniper's joint venture with Ericsson (see Juniper Unveils 'Wireless Router') gives the Swedish vendor exclusive rights to resell the J20 GGSN. If Juniper wants to address a larger market, Bieberich says, it will have to develop an own-brand product.

Ted Jackson, senior research analyst at U.S. Bancorp Piper Jaffray agrees that Juniper could now build a wireless router. But he says the company's desire to go it alone may depend very much on the how its venture with Ericsson works and how the issues surrounding Siemens and the Unisphere acquisition shake out.

Jackson says he has been "pleasantly surprised" by the sales of the J20. Unstrung spoke to a number of analysts about the revenue derived from the J20; and most agreed that the box did about $5 million in sales last quarter, a figure that is expected to increase over the next couple of quarters.

Any moves by Juniper to develop a wireless router for the wider market could put the kibosh on the Ericsson JV. "I think that would piss Ericsson off," Jackson says.

But how happy can Ericsson be now that Siemens has a stake in its erstwhile partner? The German vendor also resells mobile infrastructure kit based on Unisphere's ERX products.

"It is hard to say," agrees Yankee's Bieberich. "It certainly raises some questions about Juniper's future."

Questions that Juniper isn't keen to answer at the moment. We called Juniper about its mobile strategy for several days without success and were eventually told to email the firm our questions. Juniper said today that it couldn't answer those questions because they were "premature." [Ed note: It's alright, Dan, it happens to every journalist sometimes, its nothing to be ashamed of…] — Dan Jones, Senior Editor, Unstrung
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mplsrocks 12/4/2012 | 9:52:22 PM
re: Juniper's GGSN Gamble? Ericsson recently signed a wide ranging agreement with Huawei technologies, the chinese router giant. it seems that ericsson is hedging its bets by having an alternative router vendor, in case its alliance with Juniper ends. That could spell some trouble for Juniper as not only Huawei's routers sell for a fractions of Juniper's cost, but combined with Ericsson's dominant position in the wireless space, they could be a force to reckon with..

Comments welcome

Litewave 12/4/2012 | 9:52:18 PM
re: Juniper's GGSN Gamble? Actually, the recent Ericsson Huawei deal was primarily about ERICY licensing Mobile technology to Hauwei - it wasn't about ERICY reselling Huawei gear (although that may be a possible scenario down the road).
Nomoredemo 12/4/2012 | 9:52:15 PM
re: Juniper's GGSN Gamble? Does Huawei has a wireless router ? To my knowledge not yet they are working on it. The other company in China that may have one by now is ZTE. These guys (ZTE) are a pomping machine of new products, im not sure if they work well thow . Does anybody have any info on them (ZTE) ?
sigint 12/4/2012 | 9:52:13 PM
re: Juniper's GGSN Gamble? What exatly are these routers ? Can anyone point out a block diagram or an app-note on the web ?
kampar 12/4/2012 | 9:52:12 PM
re: Juniper's GGSN Gamble? In GPRS there are two types of GPRS Support Nodes (GSNs) that are part of the core data network. The SGSN (Serving GSN) is the link from the Base Station Subsystem (BTS and BSC combined) to the GPRS intermediate IP backbone and the GGSN (Gateway GSN) is the other side of the intermediate IP network that connects the mobile environment to a standard IP network, e.g. the Internet.

The difference between these products and normal IP routers is the fact that they must support several new, higher layer protocols, as well as handle the mobile aspect of the user. In practice, this means support for the GTP (Gateway Tunneling Protocol) between SGSN and GGSN and the SS7 links to the mobile databases that control the flow of traffic as the mobile user moves from region to region (or maybe even cell to cell) within the GSM/GPRS network.

Many of the SGSN/GGSN products on the market today are based upon standard router products that have been modified to encompass these new protocols, e.g. Nortel's is based upon the Passport platform. Cisco also has offerings in this area, as well as Ericsson, Nokia and all the other major GPRS players, of course.

Most good GPRS references on the web have the requisite diagrams and more detailed explanations ..... although it can a little hairy if you don't understand the wireless/SS7 part of the network.
kampar 12/4/2012 | 9:52:11 PM
re: Juniper's GGSN Gamble? PS. if you want the formal definition go look here.

"WARNING" .... 3GPP Standards Document ahead .... hope this link works okay


cyber_techy 12/4/2012 | 9:52:11 PM
re: Juniper's GGSN Gamble? With LR posting more and more about mobile, shouldn't it change its name as well to MobileReading?
netskeptic 12/4/2012 | 9:52:09 PM
re: Juniper's GGSN Gamble? > With LR posting more and more about mobile,
> shouldn't it change its name as well to
> MobileReading?

Speaking about name change, it seems to me that F---ed Industry will be more appropriate.

Also, it seems to me that LR Index found some support around 100, does it make sense to recalibrate back to 1000 now to better reflect on market moves in the sector ?


DanJones 12/4/2012 | 9:52:06 PM
re: Juniper's GGSN Gamble? Nah

Don't need to, as LR already owns Unstrung (http://www.unstrung.com) - a dedicated wireless site, which might explain why you're seeing a tad more mobile/wireless stuff on LR.

[email protected]
fishnchips 12/4/2012 | 9:52:05 PM
re: Juniper's GGSN Gamble?
An SGSN is more akin to a layer 2 switch that uses IP for transport whereas a GGSN is more akin to a RAS device...which makes me wonder why JNPR would try to make a GGSN from a core routing platform (J20/M20) instead of their recent acquisition of B-RAS technology through Unisphere.
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