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Optical/IP

Starent's Startup Double-Up

Wireless router vendor Starent Networks Corp. has extended its relationship with Asia-based customer SK Telecom (Nasdaq: SKM), bolstering its lead over rival startups in the market (see Starent Scores Again With SK).

Korea’s largest wireless carrier is to deploy Starent’s Samsung-branded Packet Data Serving Node (PDSN) within its CDMA2000 1X and CDMA2000 1X EV-DO network.

Starent already supplies kit for SK Telecom’s Wideband-CDMA network, having announced a high-profile GPRS Gateway Support Node (GGSN) and Serving GPRS Support Node (SGSN) deal last September (see Starent Shines On).

Wireless routers (a.k.a. GGSNs in GSM-derived networks, and PDSNs in CDMA systems) are the primary interface between a carrier’s radio and packet core networks. In their next-generation guises, these wireless routers comprise a new class of equipment that adds sophisticated service creation, billing, and IP traffic management capabilities to this strategic point in the network.

Starent’s VP of products management and marketing, Gennady Sirota, says that although the company’s history with the carrier “helped” secure today’s win, the vendor still had to put up a fight against a number of anonymous rivals.

“We have been through serious testing,” he tells Unstrung. “Not only were we competing with the established players, but one other startup was also competing for the business. It took a number of months to go through lab testing to live trials.”

Sirota declined to comment on the financial specifics of the deal, declaring in true marketing fashion that it is “a significant business opportunity for Starent.” [Ed. note: borrrrring!]

The contract follows earlier Starent wins in the CDMA 2000 1x market with Brazil’s VIVO, China Unicom Ltd., and North American carriers Rural Cellular Corp. and U.S. Cellular Corp. (see Starent Wins Vivo Deal, China Unicom Picks Starent, Rural Cellular Picks Starent, and Starent Wins at US Cellular).

The vendor is yet to break into the European market, but Sirota says the region is a potential next step. “Our traction in Asia and America is where our focus has been, but it hasn’t stopped us looking very seriously in Europe, where we see continuous takeup in the data business as W-CDMA deployments begin to take shape. How aggressively we can proceed is something we are currently looking at internally. Central Europe and Eastern Europe have opportunities, we feel.”

Although today’s deal is less impressive than a contract win with a brand new carrier customer, analysts believe it gives the $55 million VC-funded vendor a further boost in the startup space. The four young hopefuls originally setting the pace in the design of IP data service nodes for next-generation wireless networks -- Starent, Megisto Systems Inc., Tahoe Networks, and WaterCove Networks Inc. -- have all experienced vastly differing levels of success (see Having a Flutter on the GGSNs).

Last year Tahoe Networks saw its assets swallowed by Finnish giant Nokia Corp. (NYSE: NOK), while Megisto Systems has had little to shout about in recent times (see Nokia Sweeps Up Tahoe). WaterCove is rumored to be on the verge of an impending takeover by French equipment vendor Alcatel SA (NYSE: ALA; Paris: CGEP:PA). (See Alcatel to Drink WaterCove?.)

“Given the importance of the Korean market, where a mixture of technologies are being deployed, it’s good news for Starent and Samsung to be involved in both the W-CDMA and CDMA2000 deals with SK Telecom and goes to demonstrate the importance of having the right partner for the right market,” comments Gartner Inc.’s principal analyst Jason Chapman.

“Getting part of SKTel's UMTS network is one thing, but penetrating its CDMA network is clearly more impressive given the operators technology mix,” adds Current Analysis's Peter Jarich. “PDSN/GGSN volume isn't on the same level as radio access gear. You just don't see the same volume of deals, and so any new ones really help to establish momentum.”

— Justin Springham, Senior Editor, Europe, Unstrung

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